Paynesville council debates keeping $1.6M in AMPI search‑charge fund as wastewater costs rise

Paynesville City Council members met to review an accumulated fund made up of industrial "search" charges from AMPI and to weigh whether that money should remain a reserve for wastewater repairs or be used for capital projects such as a new fire/public‑safety building or library.

The fund, council members were told, was created about 20 years ago to hold search‑charge revenue separate from utility revenue. According to staff remarks to the council, the balance grew slowly for many years but has spiked in the last two to three years as AMPI’s monthly search‑charge bills grew into five‑figure and six‑figure amounts; staff estimated the current accumulation at roughly $1.6 million, with some members projecting that continued patterns of charges could push total receipts toward about $2.4 million over a few years.

Why it matters: council members said the city faces several potential near‑term costs tied to industrial wastewater management — a new AMPI pre‑treatment facility, likely additional holding ponds and possible dredging — and must decide whether to keep the search‑charge fund intact as a rainy‑day sewer reserve or apply some of it to other prioritized city projects.

Public‑works staff member Dan told the council AMPI has proposed building a new pre‑treatment facility that staff estimated could cost in the $8 million–$13 million range and that increasing plant capacity would likely require more pond storage. Dan said the pre‑treatment work alone will not remove accumulated solids already in the city ponds: "You build a new pre‑treatment plant, it will not add to the existing problem," he said, adding that the city currently bypasses some flows into ponds, which increases pond biomass and could require dredging or other remediation.

Council discussion focused on two linked risks: the upfront cost of new infrastructure (pre‑treatment and ponds) and the recurring need to maintain aging pond structures. At one point members cited dredging estimates of roughly $3 million per pond and suggested that addressing all three city ponds could approach $9 million–$10 million.

At the same time, some council members argued AMPI — a large local industrial user — should bear the costs of expansions tied to its operations. Council member Paul summarized recent property‑tax figures for major local employers and said AMPI’s local property‑tax contribution is relatively small compared with other companies: "AMPI along with the building at Sooline is about $20,000," he said, urging the council to quantify how much AMPI’s presence actually saves residents on water and sewer bills before shifting city capital costs onto taxpayers.

The treasurer, Belinda, has recommended the council not spend the fund immediately; staff also noted auditors’ guidance that the city is legally permitted to use revenues from search charges for other purposes, but that choice remains discretionary. Several council members urged caution. "As a council we should commit we're not touching it," the Chair said, arguing the fund should be preserved to protect sewer infrastructure in a worst‑case scenario.

Others proposed compromise options: creating a new segregated account to track recently generated search‑charge revenue separately from historical balances, or selectively using only interest earnings rather than principal so a reserve remains for emergencies. Council members also discussed whether portions of the fund might be used to reduce bond sizes for other projects (for example, using $1.5 million to lower a future library bond), but they made no decision.

Council members said they will pursue more technical assessments (an engineering evaluation of ponds and pump/lift systems) and meet with AMPI as a full council. They also intend to continue outreach to state legislators about bonding opportunities for the fire/public‑safety building and other public projects; members said legislative results will inform any future choice about the fund.

The council did not take a formal vote on using the search‑charge funds at the meeting and left the issue open pending further financial tracking, a technical assessment of pond and treatment infrastructure, and discussions with AMPI and legislative partners.