ROCHELLE — At its meeting Monday, the Rochelle City Council unanimously approved three items related to phase two of upgrades to the Rochelle Municipal Utilities wastewater treatment plant.

After rejecting bids for the project in 2022 due to excessive costs, a redesign was done to reduce the overall cost. After the redesign, a bid opening was held on Dec. 21, 2023 and two proposals were received with base bids ranging from $10.67 million to $11.675 million. The engineering cost estimate was $8.705 million.

The low bid was from Williams Brothers Construction, which was unanimously awarded the contract on Monday evening. The project will be financed through an IEPA loan program. The loan currently includes $3.4 million in principal forgiveness and a 20-year term at 1.36 percent interest. Engineering on the project will cost $650,500 and the total cost will be $11,640,600. The city will repay a total amount of $8,148,420 after forgiveness.

"It seems to be with this being phase two following the last $7.5 million project we did there, this is kind of the next step," Mayor John Bearrows said. "By doing this, it looks to me like the interest rate is extremely reasonable for a 20-year rate. In the city we've always taken the attitude of trying to keep up with infrastructure improvements and maintenance so we don't all of the sudden hit a big bill and have to have a major increase in rates for users. And the forgiveness number is a big one."

A rate analysis was conducted to determine the cost impact of the project to RMU ratepayers over the next five years and it ranged from 2.2-2.3 percent annual increases to cover the loan payment. Those projected increases fall in line with projections from RMU's previous rate analysis.

The city expects to obtain the loan agreement on March 8, hold a preconstruction meeting on March 27, start construction on May 1 of this year and finalize the project in June 2025.

"Several of our departments work pretty regularly on trying to make our community grow and bring in new people, businesses and housing," Bearrows said. "We have to keep up with the wastewater treatment plant to have capacity for those things."

Shopping center

The council unanimously approved a resolution authorizing a professional services agreement with Teska Associates Inc. for $20,000 to conduct a study on potential development tools for the Caron Ridge Shopping Center, the former site of Sullivan's that has been vacant for a number of years.

The city will explore the tools of a tax increment financing (TIF) district and a business development district, which can help with developing areas that have been vacant for years.

The city already has three TIF districts, which the council expressed satisfaction with at its January meeting. TIF districts grow funds after development is seen in an area based on the difference in improved value. That money is then used to incentivize developers. The city has not had experience in the past with a business development district, which sees development funds raised by an increase in sales tax, specifically only in the district it's located. A sales tax increase at the site of the Caron Ridge Shopping Center would be in .25-percent increments up to one percent. In order for a business development district and sales tax increase, the eventual business that fills the space would have to ask for it.

Study

The council unanimously approved a resolution authorizing the retention of Utility Financial Solutions for a cost-of-service study, a value of time of use study, a green energy rate, and line extension policy for Rochelle Municipal Utilities. The city's last cost of service study was done in 2020 and they are recommended every 3-5 years.

Green energy and residential time of use rates are becoming more prevalent with electric vehicles and the switch to green energy. The studies will cost $43,000.

"Just because you do a cost of service study doesn't always mean you'll increase rates," City Manager Jeff Fiegenschuh said. "After our last one, we reduced our commercial rates 2-8 percent. All we're trying to do is determine that we're charging the appropriate rate structure in each rate class and making sure we don't have one rate class subsidizing another. For example, those who don't have electric vehicles and green energy shouldn't be subsidizing those who do."

Demolition

The council unanimously approved a $24,875 proposal from Bruns Construction for the demolition of 517 W. 4th Ave., which the city recently acquired and obtained a demolition order for. The building is the former site of Vinny’s Barber Shop, and the building has been condemned.