While the City of Wadena wants the new hospital to hook into the city's utilities, council members last week confirmed that the city can't afford to pay the estimated $3 million cost of the extension.
The council met Tuesday, Oct. 1, and voted unanimously to assess the hospital for the full cost of the project rather than place any burden on the city residents. Within that motion, they agreed to seek all possible funding opportunities to assist in the cost of the project, with no guarantees.
The preferred option council members heard about included water main, sewer main and electrical extensions for about $3 million but also included the paving of Greenwood Ave, worth almost another $1 million. That paving project, while it was floated as a much desired part of the concept, was one that could come off the table, City Administrator Janette Bower said. It was included because the extension work is planned along the stretch of Greenwood Ave., and Public Works director Dan Kovar said the road will see increased use with the new hospital and it already requires a great deal of maintenance now.
"I think it will get used more and if it gets paved, it would be used even more," Kovar said. City council member Jesse Gibbs hoped the Greenwood Ave. paving project would remain a part of the project.
The recommended concept was said to be a better long-term solution for the city to own, operate daily, and maintain in perpetuity.
Hospital staff did not comment during the meeting, but Tri-County Health Care Chief Financial Officer Kim Aagard was present. She later shared this statement:
"The City approved a larger project to meet future needs for the city than what Tri-County requires and they are assessing Tri-County to fund the entire project. This creates additional expansion opportunities for the city to the surrounding community and with new business development, so we would expect a shared expense model given the benefits they would incur. Unanticipated incremental expenses like this have the potential to negatively impact the services that we may be able to offer in the new facility."
Within documents shared with city council members, it was explained that it's been the city's practice that new users coming on to the system are the ones that pay for the extension.
City engineer, and principal engineer with Bolton and Menk, Phil Martin described how this was no small addition to the city's already long list of utility replacement needs coming quickly in coming years. He spoke of the southwest replacement and planned work by MnDOT on Jefferson Street in a few more years. Those were projects that would already require significant funding from the city. Martin said this project was not one the city had time to plan for.
"There's some real things that you're staring at -- and then there is this," Martin said. "This isn't in the city's horizon." He went further saying this extension project is not a benefit to the city, in that no residents have come forward asking to gain water or sewer out to this area. He further explained that this type of sewer system is pressurized and would not be easy for others to tie into. So potentially no one but the hospital could use it without throwing much more money at it.
Commissioner Wade Miller aimed at a statement Tri-County Health Care CEO and President Joel Beiswenger said in previous meetings, that a new hospital project would not raise taxes of the residents. If the city paid for the project or assessed residents to pay for the project, it would mean higher taxes for residents, he reasoned.
Further discussion went into the return on investment of the project. It was estimated to take 60 years to pay for the sewer and nearly 90 years to break even on the water main extension.
Electric territory extension
The city is permitted to expand its service territory and the city intends on doing so for this annexation. The city council adopted a policy stating when annexation occurs, all city services will occur or the annexation will not happen. This policy was adopted after TCHC requested city services.
In looking at the costs, electrical rates with the city were significantly lower than from the Rural Electric Association.
The Kelly and Julie Taggart property west of Wadena in Compton Township, in Otter Tail County, is the site Tri County Health Care is now focused on for building a new hospital. Aagard said the official purchase of the Taggart property has not been executed as the archaeological study that the USDA required is not complete.