Albert Lea City Manager Chad Adams testified at the Capitol on Wednesday in support of bills that would limit local costs for wastewater treatment improvement projects in lieu of city officials estimating $72.5 million is needed to make necessary upgrades at its wastewater treatment plant.

The first bill, authored by Sen. Gary Dahms, R-Redwood Falls; and Rep. Dean Urdahl, R-Grove City, would allocate $167 million in state bonding for three grant and loan programs administered by the Public Facilities Authority.

A second bill, authored by Sen. Torrey Westrom, R-Elbow Lake, and Urdahl would provide supplemental grant funding to increase the state’s share of wastewater infrastructure costs.

A third bill would set a benchmark by either limiting local costs for wastewater treatment to 50 percent of total project costs or limiting the local wastewater rates to no more than double the average annual costs in the Metro area. Cities would be expected to receive additional state funding based on the option that results in a greater amount.

Adams’ testimony came at a press conference during which city leaders called on the state to spend more money to address the issue.

Without state funding, Albert Lea’s wastewater rates would nearly triple to $1,082 a year, Adams said. According to the coalition, the average annual residential rate in the Metro area is $274.

“These costs are hitting Greater Minnesota cities especially hard,” Adams said in a press release. “That is why we need a benchmark, a limit to how much local businesses and homeowners can reasonably be expected to pay.”

“We need more funding, No. 1, to make sure it is going to be affordable for our residents and businesses,” he said in a phone call. 

Adams predicted if the city has to fund the improvements, businesses would likely move into Iowa because such requirements are not in place there, causing the city’s water rates to increase even more.

Local jobs would be lost, Adams said, predicting the ripple effect “would be devastating for Albert Lea.” 

“I don’t use the word ‘crisis’ lightly, but that is exactly what towns across Minnesota are facing right now,” said Lakefield City Clerk Kelly Rasche in the release. “Extremely high water infrastructure costs will cripple our communities unless the state ups its game and provides more funding.”

“Yes, it is going to be expensive for the state to provide additional funding. But if it’s too expensive for the state, it’s definitely too expensive for our small communities. This is a wake-up call to our legislators to let them know that our cities need their help and we need it now.”

The MPCA enacted stricter water standards a few years ago that held cities responsible for managing phosphate levels, among other things.

In its lawsuit filed after the rules were introduced, the coalition argued that the MPCA’s limits on phosphorus levels in wastewater treatment plants weren’t based on sound scientific information.

In February 2016, the MPCA estimated Albert Lea’s wastewater treatment plant contributed about 56 percent of the phosphorus flowing to the Shell Rock River, with the rest coming from the lake upstream, runoff and drainage from farm fields and other sources. At the time, Shannon Lotthammer, MPCA director of environmental analysis and outcomes, said many lakes and parts of the river failed to meet water quality standards designed to ensure waters are swimmable and fishable.

At the time, Lotthammer said cost data cited by cities were estimates and based on a worst-case scenario.

District 27A Rep. Peggy Bennett said she is “grateful” city leaders came to the Capitol and highlighted the need to address the situation, adding it was resulting in a “dire outlook” for small municipalities.

Bennett said there needs to be a balance between regulations that ensure water quality improvements and their financial cost.

“It’s not sustainable,” she said. “The taxpayers and the state can’t sustain that amount of money.”

“I don’t have an answer. I am for exploring solutions.”

The MPCA and District 27 Sen. Dan Sparks, DFL-Austin, did not return requests for comment Friday afternoon.