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Board hears possible financing option for potential new building

It's been more than a year since Stevens County officials began talking about a possible new highway department facility. The discussion hasn't led to a decision yet as the county is still considering options.

The county is considering a new facility because of sanitary sewer problems and what officials have said are other health and safety concerns in the facility.

One financing option was briefly discussed at the July 3 county commissioners meeting.

Engineer Todd Larson said the county could use state aid construction allotment to help pay for construction costs.

"State aid would allow us to fund roughly 60 percent of the facility cost," Larson said of a possible pre-cast wall facility at a possible cost of $3.1 million. The county received $1,894,696 in state construction aid in 2018, Larson said.

State aid allotment money could be used as an initial paydown or could be used to pay off a bond at an early date, Larson said.

The ideal time to use state aid allotment money is when the county receives federal construction money, Larson said. That way, the county could use federal money for highway projects and use the state aid allotment money for a new facility, he said.

The county is scheduled to receive federal construction money in 2022 or 2023, Larson said.

If the county chose to use state aid allotment money for a new facility, it would not have to wait until 2022 or 2023 to start construction, county coordinator Becky Young said in an interview after the meeting.

The county could use money in reserves and/or a financing option such as bonds to start a project earlier than 2022 or 2023 and when federal money arrives, use the state money then to pay off the amount used when construction started, Young said.

The county could wait until 2022 or 2023 to use state money but construction costs will continue to increase until then, Young said.

During the county board meeting, Larson said Brent Hasslen of Hasslen Construction in Ortonville told him that construction costs could increase by 3 percent to 5 percent this year and 2 percent to 3 percent in each following year.

In 2015, Hasslen estimated the cost of a new facility at $2.2 million, Larson said. An annual increase of 3 percent on a $2.2 million facility would be $66,000.

Although the construction costs discussed at the board meeting were for a pre-cast concrete facility, Young said the county is still considering various construction options. One of those options includes a Morton construction building.

The board referred Larson's information to the facilities committee which has been discussion construction and financing options for a new facility.

Young said that when representatives from the city and county met over severals months to discuss a possible shared building it delayed the county's decision on a new highway department facility. The city decided not to pursue a joint facility after several months of discussion.