The Decorah City Council has unanimously approved bonding for up to $4.7 million to pay for utility extensions to the Decorah Business Park and to refinance a previous debt.

The Council held a public hearing on the matter Monday night and there were no citizen comments. However, Council member Charles Lore asked several questions before the Council voted.

“I want the public to know there are other things that are going to happen that we’ve haven’t talked about,” Lore said.

He first questioned what the $200,000 contingency fund for the utility work would cover.

City Engineer Lindsay Erdman responded it’s for unforeseen work that can’t be predicted. He said generally the contingency is 5 percent of the total project cost.

Lore also asked if Erdman envisioned any problems with the water tower in the Decorah Business Park that has been sitting idle since it was erected in 2008.

Erdman said the project being funded through the bond issue does not address the tower. He said there was a water tower inspection when it was built in 2008 and it will be cleaned and tested before water lines are connected and it becomes operational.

Lore commented when dairy farm’s milking equipment isn’t used for a period of years, problems develop with valves and gaskets.

Lore asked whether the contractor would be required to carry “errors and omissions” insurance and City Attorney Rick Zahasky responded the project specifications require the type of insurance the contractor must carry to be considered a qualified bidder.

Lore then requested the completion date for the project.

Erdman said the contract calls for 200 working days, which counts Mondays through Fridays, not holidays or weekends, with allowances for weather delays. Work is required to start by June 1. Allowing for “a window of closure” next winter, that would result in a completion of late next summer, Erdman said.

“Are there assurances it won’t get set aside for (the contractor’s) other projects?” Lore asked.

Erdman said there is a potential for penalties if the work isn’t completed on schedule.

Lore asked what the next steps would be and City Manager Chad Bird said the Council’s action Monday night authorizes the city to sell bonds. The city’s financial advisor will be at the Council’s Monday, March 17 meeting, to discuss the process for selling bonds. Bids on the project are due March 13 and staff and engineers will review them and bring a recommendation to the Council to consider March 17.

Lore asked if the city has any “leeway” with the bids if the Council “is not happy with something.” Zahasky said the bids are good for 30 days after they are received.

“If we need to negotiate or reach clarification we have 30 days to do that. If there’s something not in the project you want in the project, there is a different process -- my guess is an addendum to the bid,” Bird said.

Lore said the lift station for the wastewater collection system should be included with the utility extension work.

“We don’t even know where we’re going with that,” Lore commented.

Bird agreed the site for the station has not yet been determined.

Lore also suggested it would be cheaper to install fiber optic cable as part of the project. Erdman said there are some places that might be the case and that after bids are received, the installation could be discussed with the low bidder.

Lore questioned whether property would be annexed to the city as part of the project.

Bird said voluntary annexation has been stipulated as part of an agreement with the developer of land that will be involved. Zahasky said voluntary annexation has been part of the negotiations during the process for obtaining necessary easements.

Lore apologized for the number of questions he asked.

“I like to keep my Ts crossed and my Is dotted. I think it’s important,” Lore said.

Not to exceed

Bird emphasized the loan will be for no more than $4.7 million.

As part of the bond issue, the city also plans to refund $425,000 remaining on a 2008 loan. The city will save about $27,000 by refinancing the loan at 1.5 percent; the current interest rate on the loan is 4 percent.

Bird has said the utility extensions are “more than a business park project” and positions the area east of the city for future growth and development. 

“It’s about the future growth of our city to the east. It’s a community development project,” Bird said.