City seeks Public Facility Authority financing

Benson looks for ways to lower 12th Street and McKinney Avenue infrastructure project costs.

Benson will seek very low interest financing for its proposed $5.1 million infrastructure projects on McKinney Avenue and 12th Street South through the state.
The project, planned for 2027, would involve complete street and utilities reconstruction of McKinney Avenue from 19th to 21st Street and 12th Street South from Pacific Avenue to Oakwood Avenue.
In the Benson Capital Improvement Plan presented to council late last year, both projects would start in 2027 with final completion in 2028.
These projects could also involve the first time the city has assessed property owners along the streets and avenues proposed for reconstruction a part of the cost. That assessment could range from $10,000 for a person with 50 feet of frontage on the route of the infrastructure project to more than $31,000 for those with 150 feet.
However, there was no discussion of this part of the proposed project financing at Monday night’s Benson City Council meeting.
Because the projects would involve replacement of water, sewer, and storm sewer services to the project they may be eligible for funding through the Minnesota Public Facility Authority (PFA,) City Manager Matt Skaret told the council.
“This funding typically consists of low interest loans in the 1% to 3% range. This is better than what can typically be seen on a market rate General Obligation Bond,” he explained. “In fact, the city has utilized PFA before on a water plant/well project in 2012. The interest rate on that loan is 1.74%.”
The first step in the process to secure the funding is to apply to get on the Clean Water Project Priority List (PPL,)” Skaret said. 
“Projects must be on the PPL to be eligible to apply for low interest Clean Water Revolving Fund(CWRF)loans and other state grants and loans from the Minnesota Public Facilities ,” he said. However, the first deadline in the process is March 6, which means the city has to work quickly to get it in.
If the city can get the low-interest money, it could reduce the planned utility rate hikes that would affect all residents and business of the community.
“Council authorization is not specifically required at this stage in the process, but I believe it would be a good practice and consistent with city policy on submitting other funding applications,” Skaret told council members.
Council Members Eric Payne, Cherie Stielow, Dan Enderson, and Nancy Maanum, along with Mayor Jack Evenson voted in favor of starting the process to seek the low interest state funding.