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City of Berthold applies for $1.6 million grant to purchase land for lagoon expansion

The City of Berthold and 5Stone Development continue to discuss details of the plan, but the city is proceeding with a $1.6 million grant application to purchase land necessary for a lagoon expansion project.

3/07/12 (Wed)

Details pending on agreement with 5Stone developers

By Caroline Downs

The City of Berthold and 5Stone Development continue to discuss details of the plan, but the city is proceeding with a $1.6 million grant application to purchase land necessary for a lagoon expansion project.

The project was discussed during a special city council meeting held February 28th and again during the regular city council meeting Monday night. Mayor Alan Lee explained the project originated with engineering estimates completed for 5Stone regarding the expansion of the city’s current lagoon system, based on the purchase of 24 acres from Delano Mollerud that could serve up to 250 new homes compared to construction of a new lagoon system on 80 acres of property owned by Roger Neshem that would serve up to 1000 homes situated east of Berthold.

Engineering estimates for the current lagoon expansion project came in at $2.48 million, while the cost for building the new lagoon was projected at $5.5 million. Neither estimate included the cost of land acquisition. “They prefer to go out and relocate the lagoon,” said Lee, adding that 5Stone intended to pay most of the costs associated with building a new lagoon but wanted the city to apply for grant monies that could benefit the project.

According to Lee, the city would then own some capacity of the new lagoon system, with those details still to be determined. One option would be for the city to pay so much money per hookup needed.

One of the grants has a March 20th deadline, with $17.8 million available from the state to Ward County political subdivisions for disaster-related and infrastructure expansion projects. According to Amanda Schooling, Ward County Emergency Manager, the funds can be used to buy land for a particular expansion project.

The grant requires a 50/50 match of funds awarded, with the city of Berthold responsible for $800,000 of the total requested.

Lee and the council members expressed several concerns about the proposal from 5Stone, including keeping Berthold’s current lagoon system operational until the new system was completed, protecting the city’s interests for wastewater management, paying for long-term maintenance and operational costs, and covering liability.

During the special meeting, Ward County Commissioner John Fjeldahl suggested the city purchase the 80 acres required for the new lagoon and allow 5Stone to proceed with construction of the system. “You’ll have to annex the property, but then you’ll control it,” he said. “That may be the cleanest way to do this, if they’re willing.”

The city council agreed with the concept, even though an exact purchase price of the land in question has not been made available. In a conference call with Alex Gregg, partner in 5Stone Development, the price was estimated at $9,000 to $11,000 per acre.

Gregg also noted the city would eventually own the lagoon system built by 5Stone. “Our intention isn’t to be in the septic business,” he said. “We assume the city would take over later.”

“Would you build the lagoon and work out an agreement [with the city] as to the operations, if the city purchased the land?” Fjeldahl asked.

Gregg suggested the city submit the current grant application, given the impending deadline. “We can structure an agreement later,” he said.

Berthold city attorney Bryan Vans Grinsven said at that time he would discuss further details regarding the possible land purchase and agreement with attorneys for 5Stone.

As of Monday’s city council meeting, Van Grinsven had reported to council member Mark Birdsall that 5Stone was willing to allow the city of Berthold to purchase the 80 acres for the new lagoon. However, no purchase price was announced and no further details of an agreement about use of the lagoon between the city and the developer had been discussed.

Birdsall and Lee repeated their concerns about the city covering long-term maintenance and operation costs of the lagoon after 5Stone completed construction.

“If we don’t have a water meter out there, and we don’t have sewer, we’re not going to be able to collect any fees out there,” said Lee. “[Residents of the development] are going to want the same services we have, but there has to be some way to pay for those services. We have to have an agreement with 5Stone going into this.”

Council member Bob Inman represented the city at a meeting of the grant applicants in Minot on Friday. The individuals present reviewed and prioritized all applications for the $17.8 million available grant money, with the Berthold application rated seventh behind six projects submitted by the city of Minot. “I didn’t get us very high on the list,” Inman said as he apologized Monday night.

“Well, you got us right to where the money quits,” Birdsall joked.

Lee said he disagreed with some of the priorities, especially a project submitted for a golf course in Minot. “This is just preliminary,” he said. “The county commissioners take a look at it next and then the state.”

The application will be submitted for the lagoon project, but the council took no further action Monday night toward the purchase of the 80-acre tract for a new lagoon or drawing up an agreement with 5Stone regarding operation of a new lagoon. The council still has an option in place to purchase property from Delano Mollerud adjacent to the existing lagoon, should the council decide instead to expand that system.