City Council moves Austin Utilities service expansion out of work session

Published 10:39 am Tuesday, December 5, 2023

The Austin City Council on Monday night gave unanimous support to Austin Utilities to expand its coverage area to a pair of plots on the fringes of Austin.

Earlier this year, the council agreed to AU working with Freeborn-Mower Cooperative for the expansion of services to the two plots that were brought into the city when it expanded its boundaries..

The two properties are just north of Interstate 90 and west of the 18th Avenue NW business corridor. The Kehret Area is 183.7 acres and the Murphy area is 46.8 acres.

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According to Austin Utilities General Manager Mark Nibaur, the AU Board of Commissioners approved a 10-year agreement with Freeborn-Mower on Nov. 21. According to the agreement, AU will pay an up-front cost of around $20,000 for taking over infrastructure, connecting to customers and then disconnecting from Freeborn-Mower.

As part of the 10-year agreement, Austin Utilities will also be required to make up the loss revenue to Freeborn-Mower, accounting for around $4,000 a year, however, the Southern Minnesota Municipal Power Agency (SMMPA) has a Load Acquisition Credit based on usage that will help offset that cost by around half.

“I believe it should be a priority for AU to expand service territory when opportunities arise,” Nibaur said in a memo to the council. “This allows our customer base to expand as the property develops, which in turn spreads our operating costs over more (kilowatthour) sales.”

One-way projects

During its regular meeting, the council approved an amendment to contract with WHKS regarding engineering services for water main design related to the Oakland Avenue and First Avenue one-way construction projects, that’s expected to start in 2025 and expand over three years.

Cost for the work will cost $50,880, however, the city ultimately will not pay extra after it receives reimbursement from Austin Utilities, according to Assistant City Engineer Mitch Wenum in a memo to the council and mayor. 

Further related to the one-way project, the council voted in support of a resolution that will allow the city to pursue a Local Road Improvement Program grant for $1.5 million from the State of Minnesota.

If the grant is approved, money would come from a pot of $102.967 million available for projects like the one Austin has coming up. The money would be applied to the Oakland Avenue portion of the project only. 

A second information meeting is planned for 5:30 p.m. on Dec. 13 at the Austin Public Library. Options will be presented based on feedback from residents at the previous informational meeting as well as a survey.

Long term airport project

The council also approved a contract with SEH for consulting services connected to the city’s long-awaited airport fuel system upgrade.

City Engineer Steven Lang said this has been a top project for the past 5-6 years. He reported Monday night that the city has access to money from the state that would pay 70% of a $600,000 project.

The contract with SEH will cost $82,400.

The system in question is around 30 years old and includes two 10,000 gallon underground tanks and dispensers. The project would include new above ground tanks, new dispensers and an automated card reader system.

Plan development is expected to start this month with construction targeted to start in June of next year.