The city’s going to have to borrow money. There’s no question about that.”

Mayor Mike Henke

The City of Stanley will need to borrow money.
Faced with the need to finance the central water treatment plant as it waits to apply for principal forgiveness from the DNR, keeping the $9.5 million project going in the meantime means taking on debt.
“The city’s going to have to borrow money,” Mayor Mike Henke said of the immediate present and cashflow matters. “There’s no question about that.”
Giving presentation meanwhile on the city’s options with principal forgiveness for the Central Water Treatment Plant and other projects once application for principal forgiveness was made was Tia McCarthy, Project Engineer for CBS Squared. Soon to turn over the project, she started by introducing replacement Tyler Hastings.
“I don’t know if you guys have met,” she said. “This is my colleague Tyler Hastings. He’s going to be taking over these projects moving forward after this week, so he’s here for continuity’s sake.” With introductions made McCarthy went into project details.
“I put together the funding options for Well 11,” she said, putting a presentation of different options onscreen.
“At the last meeting I talked about CDBG. You guys talked about safe drinking water. We talked about when could this get done, how soon does it need to get done?”
Brought up by McCarthy was a DNR email where concerns were shared about city well capacity, an email expressing concern that Well 11 stay in 2026 as indicated in the capacity report.
“We had anticipated a summer 2026 construction program for well 11, but we’re not currently on track for that,” McCarthy said.
In terms of funding meanwhile there were four options, A, B, C, and D.
“A is going to be your fastest timeline,” McCarthy said of the options. “This is going to be an application due June 30 of this year. ‘Application’ means full plans and specifications. We don’t have any plans to start it. We do have survey collected, we have a PSC construction authorization application submitted. That has a six month timeline, which is why we want to get it in before plans are finalized. But we would need to move quickly to get the project design in time for this deadline.” With funds available in quarter 1 of 2027, construction could start following DNR plan approval.
“So you could start this project before the funds are available,” McCarthy said. “Option B would be to do the same thing, except in the next fiscal year. That means we don’t need to design a project in less than four months. Just letting you know that it’s an option. DNR funds are released as reimbursement to construction expenses.”
What this means is that funds came in with bills, not project approval.
There was also Option C.
“Option C would be the CDBG route,” McCarthy said of the acronym standing for Community Development Block Grant. “This is going to be a longer timeline because of where we are in their funding cycle. Applications are due May 2027. It’s too close to that May deadline with the long checklist of funding requirements for us to get it in this year.” McCarthy said funding for Option C would be finalized in December 2027 with construction starting in winter or spring 2028.
There was also option D, combining CDBG with a safe drinking water grant.
“I did throw a fourth option in here, if you were for sure wanting to go the CDBG route and you want to pair that with safe drinking water,” McCarthy said. “That’s an option as well.”
CDBG requires a half million dollar package from a different funding source, whether the city, DNR, or other source. It would take more time though.
“The timeline would be with the DNR’s 2028 funding cycle,” McCarthy said. “Basically when you pair these two together CDBG has more strict rules and therefore it’s better to secure those dollars first. But that would still allow you a similar timeline of construction starting in spring of 2028. C and D have similar construction timelines.”
Mayor Mike Henke had a question.
“So what if we did both of them?” he asked.
“Your water utility could tell you what their first failure load is going to be if you’re running at a deficit.” McCarthy said. “You could run into issues during fire events, water pressure issues. If things need to get taken down for maintenance it’s likely to have low pressure in different areas.”McCarthy said the DNR was sending ‘concerned’ letters on city water supply.
“What do you need from us tonight?” Henke asked.
“I think there was a conversation on a timeline for Well 11,” McCarthy said. “If you guys do want to move forward with the DNR funding for fiscal years 2027, I would propose that our team bring a contract to you next council meeting for us to get into design on that.” McCarthy clarified that this would be option A.
“What’s the maximum funding from the DNR on safe drinking water?” Wards 1 to 8 Alderperson Mark Fitzsimmons asked on the grant.
“That’s back to what we were talking about last meeting,” McCarthy said. “DNR’s max principal forgiveness per funding cycle is $1.6 million.” McCarthy said Well 3 had maxxed out at 50 percent principal forgiveness, predicting Well 11 would have a similar figure for principal forgiveness. Bumping Well 11 in the funding cycle would allow for more principal forgiveness for Maple Street and the Central Water Treatment Plant.
“They have given you the caveat that if you bump one project, we’ll move your principal forgiveness dollars down to the next one for your community,” McCarthy said. The question of what to keep and what to move forward was the issue.
Maple Street needed to be in 2026 as substantially complete.
“If we go with option A there would be no principal forgiveness for Well 11?” Wards 1 to 8 Alderperson Ben Wald asked.
With more discussion it was decided to do principal forgiveness for Maple Street in 2026, the Central Water Treatment Plant in 2027, and Well 11 in 2028. DNR allowed for the project to be in place before principal forgiveness was applied, while CDBG required funding in place before the project started.
Before the night was over the council had decided to jurisdict Maple Street and Well 3 in 2026, the Central Water Treatment Plant in 2027 with CDBG, and Well 11 in 2028 with CDBG and a Safe Drinking Water grant, motion made by Fitzsimmons and seconded by Wald.