One notable issue discussed was the reconstruction of the wastewater plant, estimated to cost around $10 million, with the city responsible for covering approximately $2-3 million. The council considered a 10% increase in water rates to help finance this project, which they described as a conservative measure necessary for maintaining the city’s infrastructure. The financial strategy includes allocating $205,000 for depreciation and debt service, with $178,000 directed toward actual debt payments. This leaves $27,000 as a budgeted expense reduction.

The wastewater plant reconstruction is important for the city, as it aims to address aging infrastructure and improve operational efficiency. Concerns were raised about relying on graywater leech sludge hauling revenue, especially given uncertain future conditions. The city currently partners with G&G for hauling from local holding tanks, but questions about the sustainability of this revenue stream prompted a cautious approach to budgeting.

The council also examined the impact of new apartment developments on water sales and rate structures. While these developments increase the customer base, actual water usage growth has been gradual, likely due to efficient fixtures. The current rate structure, which bases charges on a single building meter rather than individual meters for each unit, raised concerns about equitable billing. The council acknowledged the challenge of balancing fair charges for existing customers while supporting affordable housing initiatives.

The discussion extended to the financial aspects of water and wastewater departments. Anticipated utility billing for 2025 is projected at $430,000, with a contemplated 10% rate increase expected to generate approximately $43,000. This, combined with other budget items, brings the total projected expense to $533,000. The council emphasized the need for a comprehensive approach to maintenance and capital projects, considering a potential $10 million reconstruction project at the wastewater plant that would necessitate a substantial rate increase.

The council also discussed the Energy Technology Innovation Partnership (ETIP) grant, aimed at auditing the city’s electricity distribution system. The ETIP grant’s objective is to study the distribution of power through the city’s circuits and explore the potential to use a third circuit to accommodate anticipated increased electrical loads. This project, conducted in collaboration with the National Lab of the Rockies, is expected to last up to two years. The city could receive reimbursement for up to $50,000 in expenses related to the project, emphasizing the importance of maintaining equipment and preventing power outages.

The ETIP grant positions Grand Marais among a select few communities benefiting from energy resilience initiatives. The project involves analyzing the distribution system and determining if additional circuits are necessary, with deliverables anticipated within a year after the analysis begins. This initiative is seen as an opportunity to develop different electrification scenarios to address future infrastructure needs based on varying load conditions.

Additionally, the meeting addressed budget considerations for the water department. The discussion included inspection needs for the moose tower, a water tank approaching its 20-year inspection milestone, with estimated costs between $25,000 and $30,000. Repairs for fire hydrants and curb stops, along with a leaking mainline valve from the 1980s, were also highlighted. The council acknowledged the need for proactive measures to ensure compliance with Department of Health recommendations on water filtration and disinfection practices.

The council considered the declining water usage trends and the potential necessity of further rate adjustments to sustain operations. The conversation about sources of income and the impact of not collecting facility fees from new customers underscored the importance of future planning for the water utility system’s sustainability.