MEDFORD — A month after Medford received a “yes” from its neighbor to the north for connecting sanitary sewer lines, the small town’s mayor and city council were taken aback to learn that Faribault began discussing fees without further communication between the two governments.

When the Medford City Council first notified Faribault that they were interested in pursuing a connection agreement, Medford requested rate charge estimates. According to Medford City Administrator Any Welti, the Faribault City Council already had discussed rates that could be charged to Medford and seemingly agreed on what those rates would be.

The most recent number that Medford was given for an estimated wastewater fee to regionalize with Faribault was $310,000, while the number that was discussed at a Faribault work study session in May landed at $430,000. According to what Welti presented at the regular Medford City Council meeting Monday, that would mean that Medford would be hit with a 50% surcharge, equaling an impact of $120,000 a year in rate fees.

“We had asked [Faribault] to consider what rate they would charge,” Welti explained, adding that Medford had expected Faribault would follow the same agreement they used with Roberds Lake, which was a 5% surcharge. “Faribault wanted to charge the rate 50% above what the Faribault residents are currently paying for wastewater, so that is the rate they have presented.”

During the Medford City Council meeting, Welti was under the impression that the Faribault City Council had already approved this rate — which uses a 1.5 multiplier — but Faribault Public Works Director Travis Block said that is incorrect.

It was just a recommendation,” Block explained. “I had looked to other municipalities on how they handled this situation and it was kind of all over the board. Some places looked at a portion of a capital project to come up with a cost. Another just used a simple 1.5 multiplier, so I went with that as I was trying to keep it as simple as possible.”

Block said that some financial consideration has to be taken during this potential connection agreement, stating that the rates Medford will be charged is a “trade off” for the service Faribault would be providing.

“We’d be serving a community that is outside of our own and with that we a limiting our own capacity in our community,” Block said, adding Faribault would not be receiving any tax benefits from the residents of Medford. “This recommendation is not made to deter Medford. The goal is simply to capture funds for giving up — or really selling off — our capacity.”

During the May work study session, Block said that Faribault City Council never discussed how they plan to go about negotiating rates with Medford, but that they are waiting for Medford to go through its own process and bring what it has to the table.

Also in May, the Medford City Council authorized Mike Bubany to complete a rate analysis for the regionalization with the Faribault option. The purpose of the analysis is to help determine future rates for Medford residents and to reference during discussions with Faribault as an agreement is developed.

“I would want to believe that the door is option and that we can go back and do some negotiations, but we also need to have more ammunition to do just that,” said Medford Mayor Lois Nelson.

“What good does a rate analysis do us if we get dictated to by them?” interjected council member Marie Sexton.

“Well I think there is a missing step,” Nelson responded. “I would be more comfortable seeing us get the rate analysis done so that we can have it as a negotiation tool in going back to their leadership.”

While the Medford City Council agreed to move ahead with their original plan to develop a rate analysis, there was still obvious tension in the room regarding the drastic difference between what Faribault discussed for Medford and what the city already has in place with Roberds Lake.

“This 5% surcharge to Roberds Lake and a 50% surcharge to us just told me that somebody on the council or in the city has a second home on Roberds Lake over there,” Sexton said. “It’s just crazy. Somebody was treating somebody well and we’re sitting here with 50%.”

However, Block states that the Roberds Lake surcharge is simply another misunderstanding.

“The Roberds Lake agreement was set up probably around seven years ago with a totally different council body and a lot of different folks involved,” Block said. “But what they need to understand is that Roberds Lake is a finite thing. Medford isn’t always going to stay the same size. I personally see them increasing over time. But when the Roberds Lake agreement was established it was capped at a number of connections and that was it.”

Welti also reminded the Medford City Council that Faribault is in no way obligated to make the connection with Medford, so that some fees need to be expected.

“There has to be some sort of cost,” Block agreed. “There’s a benefit for Medford because their wastewater is handled and dealt with, so [the rate} is our trade-off for providing that service to them.”

Medford first began discussing a possible wastewater connection with either Faribault of Owatonna in August. The discussions began because Medford was faced with two main problems: its wastewater treatment facility needs to be upgraded while the city, because of its size, continues to have trouble hiring and keeping wastewater operators.

Developers of a proposed car club west of Dundas also approached the city of Faribault regarding a wastewater connection, but during the May work study session the Faribault council members made it clear that they were more responsive to Medford’s request.

Reach Reporter Annie Granlund at 444-2378 or Follow her on Twitter @OPPAnnie.

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