Kandiyohi holds special-assessment hearing on $7.6 million Phase I street, utility and water tower project

The Kandiyohi City Council held a public hearing July 16, 2025, at City Hall to discuss proposed Phase I street and utility improvements and a new water tower as part of a multi-phase infrastructure plan estimated at about $7.6 million. City staff presented the project scope, funding sources and an estimate that about $500,000 could be assessed to abutting property owners after grant funds are applied.

The Phase I work identified by staff includes reconstruction of several north-side streets (3rd through 6th Streets N), McLaughlin Avenue (2nd to 3rd), McDermott Avenue (4th to 7th), and Pacific Avenue (frontage road), plus construction of a new 75,000-gallon water tower, curb-and-gutter and bituminous paving, drainage improvements, and replacement of sanitary sewer, watermains and storm infrastructure. Officials said the preliminary engineering report was submitted to USDA Rural Development in 2021 and that the overall effort is planned in three phases, with later phases to address the water treatment plant and additional street/utility work.

City staff presented an estimated total project cost of $7,612,000 and a funding package that included a USDA Rural Development loan ($1,079,000), a market loan for ineligible items ($831,000), a USDA grant ($1,997,000), Water Infrastructure Fund (WIF) water grant ($2,441,000) and WIF sanitary sewer grant ($1,264,000). Staff summarized total estimated loans of $1,910,000 and total grants of $5,702,000. Under the assessment approach described, the city proposes to assess roughly 20% of remaining costs after grants are applied; staff estimated the assessable portion of the street project at about $500,000.

Officials explained how assessments would be calculated: street assessments based on abutting frontage (standard lots charged per linear foot; corner lots assessed at one-half long and one-half short side when the project abuts both), and flat-rate charges for water and sanitary service where those services are already installed. Staff gave an illustrative street assessment rate of about $45 per linear foot and estimated water and sanitary service charges of approximately $2,200 per lot. The city also noted property owners could prepay assessments to avoid interest.

The council review included a detailed schedule: a public open house was held Nov. 25, 2024; plans were submitted to USDA in December/January; this public improvement hearing occurred July 16, 2025; the city plans to advertise for bids in July–August 2025 and hold an assessment hearing in late August 2025. Officials said construction could begin on a portion of the work in Fall 2025, with substantial completion targeted for November 2026 and final completion (final paving lift) in Summer 2027.

Members of the public raised questions during the comment period about later phases (II and III), the size of the proposed water tower, potential impacts to boulevard trees and drainage concerns near Center Park. It was clarified during the hearing that this special assessment proceeding addressed estimated costs for Phase I only; Phases II and III will be discussed at subsequent meetings. Maps of current infrastructure and proposed improvements are posted at the Civic Center/City Office for public review.

The council did not take legislative action on assessments at the meeting. Council Member Spencer Hunt moved to adjourn at 7:56 p.m.; Council Member Toby Giese seconded the motion. No objections were raised and the public hearing was adjourned. An assessment hearing on the Phase I project is scheduled for late August 2025.