To make residents irate, raise their water bills, Keith Swenson said.
The mayor of Henderson, located less than 60 miles southwest of Minneapolis, is trying to secure state funding to fix a water discoloration problem in his city. Buildups of iron and manganese in the municipal system cause it.
Technically, the water is OK to drink. Aesthetically, it’s not pretty.
Ironically, Swenson thinks funding might come easier to build a filtration plant if the water had more issues. “If we had any contaminants we could probably find funding more easily, rather than just aesthetically unpleasing water,” he said.
With hundreds of cities vying for state bonding bill dollars to fund local infrastructure projects at the Legislature, Henderson’s needs are getting stacked up against other cities. And water infrastructure is one of the biggest needs of all statewide, according to a MinnPost analysis of capital investment requests from local governments.
A total of 141 requests this year would combine for more than $1 billion in state funding for water projects alone. These projects include proposals for drinking water, wastewater and stormwater systems.
Cities turn to bonding bills — which enable the state to borrow money to fund construction — for this because covering the costs on their own could raise local user rates beyond affordability.
“We’d like to solve the problem,” Swenson said. “We can’t do it by simply raising the rates.”
Why cities need bonding bills for water infrastructure
For Henderson and many other cities, it’s an economies-of-scale issue.
The city has less than 1,000 residents, not all of them rate payers. Spreading out a large cost, say a $3.2 million request for a filtration plant, over a city of this size would be a painful hit to pocketbooks.
Now consider that Henderson has already increased water and sewer service costs to pay for $8 million in city street and utility improvements over the last five years. These improvements were locally funded.
Cities budget for work like that all the time, using water and sewer rates to help pay for it, said Elizabeth Wefel, a lobbyist with the Coalition of Greater Minnesota Cities.
“A lot of them are very responsible,” she said. “They build into rates the cost of slowly replacing pieces of infrastructure and pipes.”
Water infrastructure funding is a major focus for Wefel during legislative sessions. Aging is an issue at facilities around the state, as well as moving targets of standards for treatment at the federal and state levels.
A system adequately meeting previous standards may over time need updates to meet new requirements. Lead pipes, for example, are supposed to be removed by 2037 per a federal mandate. Congress allocated money toward the goal to start, but no guarantee of further funding is in place to keep states on track.
Generally, the federal government used to contribute a higher share of water infrastructure costs, Wefel said. Nowadays, the proportion isn’t as high, placing a higher burden on state and local governments.
So local leaders look to the bonding bill for help.
“As things have gotten more expensive and more complex, these changes get to be that it’s not something a single city can handle by itself,” Wefel said.
Sticker shock isn’t uncommon when it comes to water infrastructure costs, said Dan Childs, water and wastewater superintendent in Big Lake. His city is looking to upgrade an aging wastewater plant using $25 million in state funding.
Without bonding bill assistance, the city projects a 15% rate increase for services over the next six years, said Hanna Klimmek, city administrator. Bonding bill funding would push the increase down to 6% annually.
Additional comparisons between getting state aid and not getting it are available in a Minnesota Public Facilities Authority report from last year. The agency oversees grants and other funding programs for water infrastructure.
In Trosky, a city of about 100 people in southwestern Minnesota, a wastewater project could cost $4,555 per year per household just for debt service, according to the PFA. Another $776 per year would go to operation and maintenance of the facility. PFA funding would bring the annual cost down to $912.
What are the drivers of water infrastructure costs?
Continuing a recent focus on water infrastructure, the House Capital Investment Committee considered this question Tuesday.
One explanation is uniquely Minnesotan, according to Brian Bollig, president and founder of Bollig Engineering. His firm works with smaller cities on water projects.
“It’s colder here so we have to bury our pipes deeper to keep them from freezing,” he said during the committee hearing.
Market factors, not exclusive to Minnesota, are other drivers of cost increases. Watermain material costs rose by 36.7% and construction costs rose by 42.9% from 2015 to 2025.
Material cost increases, for cement and concrete at least, showed signs of slowing down in 2025. Construction costs aren’t following suit, with Bollig pointing to inconsistent funding as a factor.
Rep. Fue Lee, DFL-Minneapolis, and Rep. Roger Skraba, R-Ely, touched on similar points in questions to Bollig about the connection between regular bonding bill funding and construction costs.
“Does that make a case for why we should have a bonding bill every year so that we can have that certainty for labor markets?” Lee asked.
“If we decide not to do it, how does that affect the final price in the years to come?” Skraba asked.
Certainty keeps contractors in-state, Bollig said. If projects don’t get state funding, contractors seek greener pastures in other states. The remaining contractors can then charge a premium knowing there isn’t as much competition when public projects go out for bid.
“We’ve got to try to get the competition as high as we can,” Bollig said. “Those contractors in small communities, we need to keep them in Minnesota.”
Premium costs on a per capita basis are even more amplified in Greater Minnesota, according to MinnPost’s analysis. The cost per resident for water project requests in Greater Minnesota is nearly three times higher than in the Twin Cities area.
Lee asked if regionalization of water services is encouraged as an option for addressing rising prices. Bollig praised communities in southwestern Minnesota for taking this approach to lower costs. He named Red Rock Rural Water System in Jeffers and Lincoln Pipestone Rural Water in Lake Benton as examples, saying that the Legislature should encourage collaborative systems when possible.
“Every community wants independence, and at the same time if you give them a reason to help them want to regionalize, I think they’ll want to go that way,” he said.
For Swenson’s part, he said he’ll keep pushing lawmakers to pass a bonding bill this session, knowing how much it would help cities like Henderson. Just don’t take that to mean he’s feeling overly optimistic about it.
“They are so divided up there,” he said.
This article first appeared on MinnPost and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
