Organizations who are part of the Gooseberry Lake Agency will be making a decision at a meeting September 24 on the future of the project and an informational meeting for the boards was held Thursday, Sept. 10, to provide information on the status of the project plans.
The costs for the project were reviewed, along with possible scenarios for paying for the project, by Dennis Hilger from the Southwest Iowa Resource Conservation and Development agency.
The various groups who are sponsors for the project will be discussing the issues at their September meetings in preparation for the meeting set Thursday, Sept. 24, at 10 a.m. at the Mount Ayr city hall.
The agency board put the project of the shelf in past action but decided to continue to hold annual meetings. There is some question on whether the annual meetings are necessary if the project is going dormant.
“At the next meeting we have the options such as moving ahead with the project, leaving the project dormant or scrapping it completely,” Randy Bishop, chairman of the agency board told the group.
In suspending work on the project, the Gooseberry Lake Agency board asked to continue to be a partner during the next 10 years as the group continues to study the project.
The cost of the project has jumped 56 percent in three years, primarily due to the jump on land prices, it was noted.
Dennis Hilger reviewed the projected costs for building a 565 acre lake with the minimum land acquisition of 1,320 acres as of March 2008.
The total cost of the lake would be $16,959,700 of which $11,174,300 would go for the construction of the dam, $4,444,800 for recreational facilities, $935,500 for the water intake structure and $405,100 for the water transmission line to the treatment plant. The construction portion includes the $3,377,400 for moving the pipeline that is under the site which Magellan, the pipeline owners, say would be mandatory from their point of view.
Of this total, the Natural Resource Conservation Service would be responsible for $7,553,300 or some 44.5 percent of the project.
That leaves a total of $9,406,400 to be raised by local sponsors of the project. The $2,302,400 for recreational facilities, however, would come from the Department of Natural Resources and the grants found by the Ringgold County Conservation Board, so Hilger subtracted that amount from the sponsor total.
This would leave $7,104,000 to be raised by local sponsors for the project.
Hilger presented a couple of scenarios for coming up with the local matching funds.
One would be to have three local sponsors -- the city of Mount Ayr, Ringgold County and the Southern Iowa Rural Water Assocaition -- to evenly split the cost of the local sponsor needs for an amount of $2,368,000 each.
Each would then apply for a Rural Development Waste Water/Water Loan from USDA Rural Development, which would include a 40 percent grant.
This would mean that each of the three groups would take a loan for some $1,420,800 each. Hilger said this would mean an expenditure of $82,000 a year over a 40-year period to have the project moving along.
A second scenario would be for the original seven Iowa counties served by SIRWA and the city of Mount Ayr to agree to evenly divide and pay the cost since all would benefit from the water in one way or another.
This scenario would see each county and the city of Mount Ayr with a responsibility for $888,000, which would be reduced to $532,800 after the grant portion of the Rural Development funding.
Each of the groups would have to come up with $30,000 a year for the 40-year life of the loan to pay off their portion of the lake construction under this scenario.
Hilger noted that the Three Mile Lake project was done with the help of a number of counties around the area served by SIRWA.
Taylor, Ringgold and Union counties put in $600,000 each and Decatur, Adams, Adair and Clarke county put in $150,000 each. The city of Creston contributed $150,000 and the city of Afton $79,000. Ringgold county also contributed a CDBG grant of $583,970 it received and Union county had a $700,000 CDBG grant in the mix.
In this scenario, the Southern Iowa Rural Water Association would not be included in the lake construction costs but would still be responsible for the $8 to $10 million for the construction of the water treatment plant for the lake. The city of Mount Ayr could be a co-owner if they wished to contribute to the treatment facility cost.
One question asked was where the Southern Iowa Rural Water Association stood in meeting its future water needs.
Projections from a Water Needs Assessment study in 2007 predicted that the service area would need 10.45 million gallons of water per day, meaning an additional 5.17 million gallons per day.
Dan McIntosh from SIRWA noted that progress is moving ahead on the Clarke county lake, but most of the water from it would go to serve the city of Osceola with only about 750,000 gallons of water a day being available to SIRWA.
The project is being redesigned for average daily withdrawal instead of peak demand and plans are to get construction underway by 2014 if possible.
Funds for the city, county and county economic development group generated from Terrible’s Casino will make the matching funding on the $40 million project more available, Hilger noted.
With funding mechanisms in place, the project looks pretty optimistic, he said.
Projects are also being looked at in Taylor and Adair counties, it was noted.
“We could still use the water from the Gooseberry Lake project if it becomes available,” McIntosh said.
McIntosh said that if SIRWA does run up against more demand than what it can supply at some point in the future, water will be rationed system wide. Ringgold county would not be penalized for not supplying a water source, he noted.
Tom Larson, a landowner in the area of the proposed lake, said he would suggest that the agency board make a final decision not to go ahead with the project.
“Having the possibility of the lake project in the background could make it tough on landowners who want to sell their property in the future,” he noted.
He also said that county residents are already paying for water supply in the Three Mile Lake project and it would be a “double whammy” to pay for the Gooseberry Lake project as well.
Hilger noted that he had been working on development projects for 20 years and had been a part of some 350 projects.
He noted that an early mentor had told him that when it came down to it, money was not the ultimate issue. Finding leadership to come up with creative ways to get a project done was the key issue.
Representatives from the different groups attending the meeting were to report back to their boards for a decision to be made on the future of the project at their meetings over the next two weeks.
The Gooseberry Lake Agency board will then discuss the matter at the September 24 meeting.