Hoffman, Elbow Lake get economic stimulus funds to pay for water project

Eight Minnesota communities - including Hoffman - will receive loans and grants totaling $27.3 million to build long-awaited drinking water and wastewater infrastructure.

The projects are financed through the Minnesota Public Facilities Authority (PFA) and utilize the $107 million in funding the agency received through the American Recovery and Reinvestment Act (ARRA), the federal spending bill designed to stimulate the U.S. economy.

Hoffman received $700,000 to replace the water main serving Alaska, Main and Arkansas avenues and Marie Street.

The funding package includes a loan of $112,000 at 1.4 percent over 20 years and $588,000 in principal forgiveness.

"Minnesota communities have expressed a great deal of interest in using the funding to improve wastewater and drinking water infrastructure," said Dan McElroy, PFA chair and commissioner of the Minnesota Department of Employment and Economic Development. "These projects will create jobs, promote economic activity and enable these communities to have safer water supplies and a more solid infrastructure."

Projects were also funded in Waseca, Kandiyohi, Wheaton, Blue Earth, Elbow Lake, Swanville and Remer. The communities will receive low-interest loans and principal-forgiveness grants.

Last month the agency announced $37.2 million in PFA projects that included stimulus funding. Most of the PFA's ARRA funding has been obligated for projects, with the remaining funds to be awarded over the rest of the summer.

The stimulus funding will have an immediate impact on Elbow Lake, says Jeff Holsen, the city's clerk. "It's monumental; it's huge to be able to get grant money through the stimulus package," he said. "Without the funding, we would not have been able to complete the project."

Elbow Lake (population 1,275) received more than $1 million to replace piping in an older section of the city, said Holsen.

The project was "shovel ready" with the engineering largely done but the community did not have the money to pay for it. "I've been in municipal government for 23 years and nothing I've seen will have as much impact as this," he added.

The funding came from the PFA's Clean Water Revolving Fund and the Drinking Water Revolving Fund. The PFA will fund more than $200 million in infrastructure improvements this summer by combining the federal stimulus money with other funds generated from selling the PFA's AAA-rated bonds, said McElroy.