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Kandiyohi to seek additional USDA funding after water‑tower bids exceed estimates
Summary
The Kandiyohi City Council authorized applying for extra USDA Rural Development funds after bids for the water‑tower project produced a $510,000 contingency shortfall; the city will shift one alternate item to a later phase and use reserves to cover the remaining gap so Contract A can be awarded.
The Kandiyohi City Council on Sept. 15 voted to pursue additional federal funding and to authorize municipal borrowing options after bids for a planned water tower came in higher than expected.
Jonathan Pauna, a project engineer with Moore Engineering, told the council the low bids produced a $510,000 shortfall in project contingencies. Pauna recommended moving the alternate scope for boring an additional water line under Highway 12 to Phase 2 or 3—reducing the immediate contingency gap by $254,471—and using on‑hand reserve funds to cover the remaining $255,529 so the city could proceed to award Contract A. "I recommend moving the alternate for the Highway 12 bore to a later phase and applying reserves to close the remaining shortfall so Contract A can be awarded," Pauna said.
Following that briefing, Council Member Spencer Hunt moved to approve Resolution 202519, authorizing the city to apply for additional funding from USDA Rural Development; Council Member Jeff Clark seconded. Mayor Jon Lindstrand called for a voice vote: Clark — Yes, Hunt — Yes, McGillivray — Yes. The motion passed with Council Member Toby Giese absent.
At the same meeting the council also approved Resolution 202518, authorizing the execution of an advance agreement and participation in a Joint Powers Authority and accepting an offer from the Minnesota Rural Water Finance Authority to purchase a $1,079,000 General Obligation Utility Revenue Bond Anticipation Note of 2025A. Council Member Spencer Hunt introduced the motion; Council Member Scott McGillivray seconded. Mayor Lindstrand recorded the same voice vote tally and the motion carried.
Kevin Friesen of USDA Rural Development attended the meeting with Moore Engineering; the transcript shows USDA was briefed on the funding situation and that the city is pursuing both additional USDA funds and a bond anticipation note to cover project costs.
The council was also told additional soil borings for the water‑tower foundation are scheduled to begin Oct. 6, 2025, a step the city said is needed before construction can proceed. The approved combination of scope adjustment, use of reserves and potential outside funding is intended to allow the city to move forward with awarding Contract A while preserving options for completing the Highway 12 bore in a later phase.
No detailed amended project schedule or final award amounts were included in the meeting record; the council voted only to pursue additional funding and to authorize the municipal financing option described in Resolution 202518.
