By Terry Lehrke, News Editor
The Central Minnesota Ethanol Cooperative (CMEC) received the go-ahead from the Little Falls City Council for its water recycling project.
Part of the go-ahead was the approval of a $520,000 business subsidy for CMEC through the city’s Economic Development Authority (EDA). Of that amount, $500,000 is reserve funding the city collected from the plant for use of the water pretreatment facility. The remaining $20,000 is equal to the county’s appraised value of the land on which the facility will sit.
The pretreatment facility was built by the city in 1998, when the plant was first constructed and annexed into the city. The $1.625 improvement bond to finance the construction was assessed 100 percent to the CMEC, so all funds were repaid to the city, as well as additional funds to the reserve funding.
Initially, a grant was sought from the Minnesota Pollution Control Agency (MPCA), to help pay for the water recycling facility. However, as time lapsed, the CMEC came to the Council to ask that it be allowed to construct its facility without the grant money, so it could proceed in a more timely manner.
David Drown, the city’s financial adviser, said the $520,000 business subsidy is considered a forgivable loan. The loan will be payable over five years with 4 percent interest. If, during that time, the CMEC fails to remain in operation, the remaining balance of the loan must be repaid. The loan must also be repaid if the conversion project does not work and CMEC continues to purchase significant amounts of water from the city.
So too, if CMEC sells its facilities during the five years, the city will approve a transfer of the loan to the new owner, with all terms and conditions of the agreement unchanged.
The benefit to CMEC in the construction of this facility is in reduced costs of fresh water from the city —it buys 300,000 gallons of water from the city each day. This facility will allow the CMEC to reduce that amount by 100,000 gallons of water each day.
The benefit to the city is that those 100,000 gallons of water will not come back to the city’s wastewater treatment facility, which can burden the system. The cost of a new wastewater treatment facility for the city, to handle increased usage, is estimated at $8 million.