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USDA adviser says Vernon Center likely needs $475,000 in water and $210,000 in sewer costs to qualify for loan refinancing
Summary
An adviser from USDA Rural Development told Vernon Center leaders they would likely need roughly $475,000 in water work and $210,000 in sewer work for the city to qualify to refinance its loan; officials agreed to compile a work study and target delivering numbers by Dec. 31, 2025.
Ed Gilmore, an adviser with USDA Rural Development (USDA-RD), told Vernon Centers City Council on Tuesday that the city would likely need to show roughly $475,000 in water expenses and $210,000 in sewer expenses to qualify for refinancing of its current loan with Northland Trust and the Public Facilities Authority.
The council met in a special session called to order at 6:00 p.m. by Mayor Dana Ziegler to review refinancing prospects and next steps. "Right now, the city would need to spend $475,000 for water and $210,000 for sewer to qualify for refinancing," Gilmore said, adding that the figures were "a very rough estimate." He described USDA-RDs general expectation that refinanced loan packages reflect an approximate 50/50 split between new project costs and the refinance amount.
That split will affect which projects Vernon Center can count toward eligibility, Gilmore said. He identified wells, treatment work, remaining costs from the street and utility project and engineering expenses as potential candidates. Mayor Ziegler said the $475,000 figure "would cover the cost of another well," and asked whether rehabbing water-treatment filters the city purchased in 2023 or buying water meters could be counted. Gilmore said the water-treatment filters might qualify and that water meters could be allocated partly to water and partly to sewer.
On timing, Gilmore said he expected to request an extension on the proposed loan closing and estimated February 2026 as a likely closing month if the extension is granted. Council members asked staff to assemble a work study listing required items and general cost estimates so USDA-RD could determine qualifying expenses. The council agreed that city engineer Chris Knutson should participate in that work study and set a target date of Dec. 31, 2025, to provide figures to Gilmore for review.
No formal financing decision was made at the meeting. Councilor Lisa Peterson moved to adjourn; Councilor Emily Edwards seconded and the motion carried. The meeting adjourned at 7:04 p.m.
Next procedural steps: staff and the engineer will prepare the requested work study and cost estimates for USDA-RD review; any final refinancing decision will require subsequent council action.
