Following months of negotiations, the cities of Le Sueur and Henderson have come to an agreement to dissolve the Minnesota River Valley Public Utilities Commission (MRVPUC), a joint committee charged with overseeing the Waste Water Treatment facility. The two cities will begin dissolving the Joint Powers Agreement that formed the commission in 2005 on Friday, Nov. 30.
“The dissolution really needed to happen,” said Le Sueur City Councilor and MRVPUC Chair John Favolise. “I’ve been with MRVPUC for three years now. Going in, it was obvious that it needed more of a business end to it.”
The city of Le Sueur first began considering renegotiating the MRVPUC back in spring 2018. By the end of last year, Le Sueur began seeking a way out. Favolise explained that one of the city’s concerns was efficiency. He believed that monthly MRVPUC meetings prevented Le Sueur staff from being responsive to operating changes.
“It was falling apart on the business end of it because the decisions that needed to be made, you would have to wait once a month to get people together to make those decisions when we have a staff that’s perfectly capable of making those decisions,” said Favolise.
Once the Joint Powers Agreement is disbanded, the MRVPUC’s fund balance will be split between Le Sueur and Henderson at 73% to 27%.
“Those numbers are significant, because they were the numbers in the original Joint Powers Agreement,” said Le Sueur City Administrator Jasper Kruggel. “That was a negotiating point we had, because really, Henderson hasn’t used that much of the plant.”
Under the dissolution, Le Sueur will take on full ownership of the lift station on Henderson Station Road and all facilities located downstream of the station. In acquiring it, Le Sueur has agreed to credit Henderson $1.2 million for the $1.8 million Henderson still needs to pay in loans the city took out for the construction of the facility.
Henderson would be left paying around $647,000 to the city of Le Sueur over the next 20 years through monthly payments of $4,279.07. Henderson can back out of these monthly charges, but would still owe Le Sueur the remaining balance through a lump sum.
Starting on Dec. 1, 2019, Le Sueur will charge Henderson $1.20 for every 1,000 gallons of wastewater treated through the facility through Dec. 31, 2020. These rates will continue to be adjusted based on inflation.
Le Sueur is also setting a cap for the maximum amount of wastewater Henderson can consume. With a season of intense flooding this past year, Henderson averaged 295,000 gallons of wastewater a day. Now, the cities are working to cut the city’s wastewater consumption nearly in half to 168,000 gallons a day. The cities are setting out to accomplish this through a “phase-in plan,” to give Henderson time to improve its infrastructure. In 2020, a limit will be set for 250,000 gallons a day, 200,000 gallons for 2021 and for 2022, the limit will drop to 168,000.
If Henderson’s consumption rises above these caps, Le Sueur will charge $1.10 for every 1,000 gallons over the limit. If Henderson cannot consistently remain under the caps, the cities will renegotiate.
“The fines on Henderson for overages is not much at all compared to what Agropur does and what the city of Le Sueur has had in the past,” said Favolise.
Le Sueur and Henderson have also come to an agreement to cost-share the wastewater between the two cities. This item had become a sticking point in negotiations.
“Nobody really wanted to take control of it, but it’s essential for Henderson to send their waste to Le Sueur,” said Kruggel. “What we came up with was this cost-share agreement.”
Under this agreement, maintenance costs would be paid based on how much water processed by the lift station goes to each city. Currently, all of the water that goes through the station runs through Henderson, so Henderson would pick up 100% of the costs. While Henderson covers the bill, Le Sueur will cover the labor if work on the lift station is needed.
After months of negotiations, Le Sueur City Council expressed satisfaction with the terms of the agreement.
“I don’t think this is a bad deal for anybody,” said Kruggel. “Going into this, know that we’re the city of Le Sueur in a position where we’re the ones who want to get out of this agreement, (and that) put us in a tougher negotiating stance. But overall, I think we achieved our goal, and Henderson achieved its goal.”