New Richland weighs $2.5 million Street and utility rebuild, debates property assessments

New Richland — City staff on Monday presented a draft feasibility report for the 2025 Street and Utility Improvement Project, proposing full reconstruction of two blocks of Ash Street and two blocks of Broadway, upgrades to sanitary, water and storm systems, and selective sidewalk installation.

City engineer Corey, who led the presentation, said the project area runs from Trunk Highway 30 south to Fourth Street and would replace underground utilities and the pavement section. "When we're replacing everything, we're going to rebuild sanitary, water, storm — it's a full new pavement section," Corey told the council. He said the engineer's estimate puts the total project cost at about $2.5 million, including standard contingencies.

Why it matters: the work targets older infrastructure in the downstream portion of the system where televised inspections uncovered clay‑pipe failures and infiltration. Corey said televising and smoke‑testing done to date showed holes and separated joints on Broadway and that televising results scheduled for 2025 will guide final sizing and scope. "Better you can make that pipe so that water can't get in there — that is an improvement," he said, but stressed it is "a piece of the puzzle," not a complete solution to the town's flooding issues.

Financing and homeowner assessments were central to the discussion. Tony, a city staff member who presented bond options, outlined 15‑ and 20‑year borrowing scenarios and noted the city currently has a roughly $130,000 annual bond payment that drops off in 2026. He said the new bond payment for this project would likely add about $20,000 per year to the city's debt service in the early years. Staff and the council discussed spreading assessment payments to match bond schedules, allowing property owners several years to pay.

Special assessments: the city's existing assessment policy (from 2002) lists a 50% reconstruction assessment for benefiting parcels. Corey and staff said a 50% application to today's costs would, in many cases, produce assessment bills that would be difficult to defend in hearings and politically painful for homeowners. Corey noted example per‑parcel results in the draft packet that included several properties with assessments in the mid‑five‑figure range under a 50% rule. Staff proposed starting discussion at a lower rate — roughly 30% — and indicated the council could consider 20% in order to balance city affordability with defensibility under Chapter 429 of Minnesota statute governing special assessments. "When you apply a 50% assessment policy like this to the cost of improvements today you find an assessment value that is larger than you would expect," Corey said.

Design choices and homeowner options: the draft would widen Ash Street to about 40 feet in places and narrow Broadway to 36 feet to save cost while maintaining parking. Sidewalks would be replaced on one side in many locations to reduce cost and provide a continuous walking route; portions adjacent to the school would retain existing sidewalks. Corey also described a homeowner option to pay to replace private sewer or water service lines from the right‑of‑way to the house during construction; such private replacements would be contracted through the project and require homeowner waivers so they could not later appeal assessments for that work.

Grants and coordination: staff said conventional state or federal grants are highly competitive and that the current project, framed as a routine street/utility reconstruction, would likely not be competitive for flood‑mitigation funding. They recommended coordinating with the ongoing hydrology study (to be presented by Joel Lewis if available) and pursuing combined projects that demonstrate watershed or regional benefits if the city wants better grant prospects.

Schedule and next steps: staff recommended finalizing the feasibility report, ordering the Chapter 429 improvement hearing with mailed notice to affected parcels, completing design in early 2025, advertising in spring and starting construction in summer 2025. Staff noted assessment hearings typically occur after bids and construction pricing are known and that assessments would begin to be due in 2026. No formal action was taken at the workshop; council members agreed to keep the schedule flexible while staff confirms hydrology study timing and mails the required notices.

What remains unresolved: the council must decide an assessment rate to propose (staff suggested 20%–30% as more defensible than the existing 50% policy), how much of private service replacement to encourage or require, and whether to change sidewalk policy citywide. The city will also incorporate forthcoming televising results and the hydrology study into final design decisions.

The council did not vote on the project at the workshop; staff will return with a finalized feasibility report and proposed hearing dates for the improvement and assessment hearings.