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Park Rapids City Council debates use of ARP funds

The city has been awarded $448,000 in federal funds through the American Rescue Plan – half this year, half in 2022. Council members discussed options for using it at a special workshop on Aug. 10.

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This concept drawing shows the layout of the proposed workforce housing subdivision northeast of Walmart (bottom right) with street outlet onto Career Path (out of frame at the top). Contributed / Heartland Lakes Development Commission

The Park Rapids City Council had a workshop Aug. 10 to discuss options for how to use American Rescue Plan (ARP) funds awarded to the city.

City Administrator Angel Weasner explained that the city was awarded ARP funds totaling $448,000 – half this year and the other half next July.

The funds can be used for certain kinds of projects, such as infrastructure, broadband and COVID-19 mitigation. Weasner said $86,000 of this year’s award is already being used to install the city’s new finance system, which will enable staff to work from home in the event of another shutdown.

She identified four options for using the remaining funds, totaling $362,000 over two years:

  • Lead mitigation in the water mains under 5th Street, running east from Fair Avenue. Weasner said this need, along with decrepit clay tile sewers in the Heritage Living neighborhood, has been identified as an optional bid alternate in the $3 million Fair Avenue street improvement project, and the lead mitigation alone is estimated to cost $500,000.

  • Some contribution, such as preliminary engineering costs, to create infrastructure to support a workforce housing development east of Walmart. Mary Thompson with the Heartland Lakes Development Commission said Hubbard County is putting its ARP funds toward this $1.55 million project, to build the streets and utility mains for a neighborhood of 29 houses and five multi-family structures, likely to be 10-plex townhouses, and the county would like to know whether the city will participate since the project is within city limits. Thompson said two developers have already expressed a preliminary interest in developing the housing.

  • Infrastructure for a new industrial park. Weasner explained that only one small parcel remains unsold in the city’s current industrial park, but she noted there are other funding sources that may help with this project.

  • Purchasing a new fire engine to replace one that is constantly in need of repair and now needs a new engine. Noting this would cost $500,000 of which the fire department has already allocated $200,000, Weasner admitted she wasn’t sure the ARP funds could be used for this.

Weasner suggested choosing only one project, besides the financial system, in order to limit the complexity of the state reporting requirements for city staff to deal with.
Council member Erika Randall was initially interested in the fire truck proposal, since she opposes levying taxes for it and is concerned about high bond rates.

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“I want to show this year that we really used this money to keep our taxes the same or decrease them if possible,” she said.

However, most of the council’s discussion focused on the first two options, particularly after council member Tom Conway pointed out a depreciable item, like a vehicle, is not a long-term benefit.

Thompson said the houses in the proposed neighborhood off Career Path, north and west of the Meadow View and Meadow’s Edge apartments, may be valued at $200,000 each, adding approximately $6 million to the city’s tax base in addition to the townhouses, which could be owner occupied or rented.

Asked how much the preliminary engineering for the housing infrastructure would cost, Thompson and Weasner estimated between $120,000 and $150,000.

Council members voiced concerns about how urgently the lead mitigation on 5th Street is needed. Weasner said there have been no test results showing unhealthy levels of lead so far. She said it will need to be addressed sometime, but doesn’t need to be part of the Fair Avenue project.

Conway suggested spending the remainder of this year’s ARP funds – $138,000 after the cost of the financial system – toward the housing infrastructure project, and having another workshop next year to decide what to spend the second allotment of ARP funds on.

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