Without a bonding bill, funding for public works projects across Minnesota in limbo

CATHY WURZER: And the lack of a bonding bill, which was supposed to have been one of the main tasks of this session, is where we'll start today. Lawmakers fielded more than $7 billion in requests for state and local projects around the state. Because of the lack of final action on the bonding bill, most of those projects are getting no state money. Without state funding, infrastructure projects across the state, including roads, health centers, and public works, are in jeopardy.

Bradley Peterson is the executive director of the Coalition of Greater Minnesota Cities. He is on the line right now. Bradley, thanks for joining us.

BRADLEY PETERSON: Absolutely. Good afternoon, Cathy.

CATHY WURZER: It sounds like this session, of course, as you obviously saw and heard, ended with some fireworks. No bonding bill, which, as I mentioned, that was the main order of business this session. Did that surprise you at all?

BRADLEY PETERSON: Well, it did. As you noted, this is a year where a bonding bill is typically done. The state budget had been done last year. Granted, the legislature had a lot on their agenda, but they really should have prioritized getting a bonding bill done to meet the needs of communities across the state.

CATHY WURZER: What kind of needs are out there? Give us a bit of a blueprint.

BRADLEY PETERSON: Oh boy. It's everything from clean-water projects, wastewater projects, roads and bridges, nursing homes, educational facilities. It really runs the gamut of things that are fundamental to strong communities, especially in rural Minnesota.

CATHY WURZER: So we're talking about a fairly large impact?

BRADLEY PETERSON: Oh, absolutely. Absolutely. And I think without a bonding bill, now there's going to be a lot of head scratching about what to do. Can projects go forward, finding other sources of funding? Do projects get delayed? Do projects not happen at all? There's going to be a lot of really difficult conversations, I think, held in the wake of the legislature's failure to get a bonding bill done.

CATHY WURZER: But there are other avenues for funding in some instances. Is that correct?

BRADLEY PETERSON: In some cases there are. I mean, some of the projects that were going to the state also have federal funding that they've been able to leverage. I mean, usually what happens, especially with really big projects, is they're stacking various sources of funding on top of each other.

But in the case of a lot of these bigger-ticket water or wastewater projects, state funding really is crucial through the bonding bill, either to fund the grant and loan programs that cities apply to the state for, or, in some cases, projects are so big that they get additional naming in the bonding bill and additional dollars more directly.

And so in many cases, you're going to have very poor communities that have to go forward with these projects because of state and federal regulations, and they're going to have to put that cost on ratepayers and property-tax payers, who, in many cases, are already paying above-average rates for their services. So it really is a disconcerting situation for these communities to try to have to navigate.

CATHY WURZER: Are there some projects, to the best of your knowledge, Bradley, that are kind of time sensitive? I'm thinking about-- gosh, we did an interview fairly recently with the head of the Hastings, Minnesota, water-treatment facility about the concern about PFAS in some Hastings wells, and they asked for bonding money to clean up that issue. Are there projects like that around the state of Minnesota which I guess you would say would be time sensitive?

BRADLEY PETERSON: Yeah, I think Hastings is a good example. I don't know a lot about their particulars. I do know it's drinking water and for PFAS, as you mentioned, which is a big problem in the east metro. In Albert Lea, for instance, they have a massive project, $80 million, that is not only upgrading an old facility but is responding to phosphorus regulations from the MPCA. I think in the last iteration of the bill that we did see, they were slated to get $12.5 million, which would have gone a long way to help them. They're going to have to start at least with the first phase of their project probably regardless.

Likewise, city of Aurora. They've got a big drinking-water project. They're especially hard hit because their annual household water rates are about $1,000, and compare that to the average in the metro, which is about $377. So these are already communities that are pretty significantly burdened with costs that don't have a lot of options and are probably going to have to go forward.

CATHY WURZER: Now we should mention, of course, there was this $2.6-billion bonding package last session. It kind of came late in session last year, but there was still money spent. So that was significant. So at least do some of these projects take some of that money, or are these projects that we're talking about in this bonding bill something completely different?

BRADLEY PETERSON: It's probably a combination of a little bit of both, but I would remind you that last year's bonding bill was so big and needed to be passed last year because they failed to pass a bonding bill during the 2022 session. So last year was really just catch up, and this year was kind of getting back on schedule.

And in the case of these water and wastewater projects, especially the ones funded through what's known as the Public Facilities Authority-- kind of they're the bank for cities that have these needs-- the lists are long. And so just putting money into those programs gets you so far down the list, but without funding this year, that list is going to just continue to grow year after year after year. And so it really is unfortunate that we weren't able to get a bonding bill across the line here.

CATHY WURZER: Are you concerned that the bonding bill stalled out because of some unrelated issues? And given the dynamics, the political dynamics, do you think this might happen again?

BRADLEY PETERSON: I am concerned about that. I think these are so fundamental-- these projects are so fundamental to the basics of what government should be doing in terms of providing public service, and when they get tied up in all of the other dynamics of a legislative session, it's really frustrating. And I think it really is baffling, frankly, to a lot of local elected officials who, this is not their full-time job. They're trying to run their community the best they can. They've got other things that they're doing in life, and they can't figure out why the legislature can't take action on what really are basic bread-and-butter functions of government.

CATHY WURZER: Now, as you heard in my newscast, legislative leaders are already saying no to a special session. They just don't want to get involved with that. They, of course, have their eyes on the upcoming election.

What about next session, though? As you mentioned, not last year but the year prior, it was like three sessions all rolled into one in terms of the pent-up demand for bonding money. What happens maybe next session?

BRADLEY PETERSON: Yeah, they're going to have a-- the asks are not going to go away. They're only going to grow. The needs continue to grow. And so the majority in the House, whoever ends up winning that election and whatever ends up happening with the Senate, they're going to have to wrestle with not only the biennial state budget, which is a big lift in and of itself, but they're going to need to do a bonding bill, and it's probably going to need to be pretty big. And I think it's really important that the legislature-- and the governor hopefully leads on this-- really knuckle down and focus on the basics of making sure this infrastructure can get funded.

CATHY WURZER: All right, Bradley Peterson, thank you for your time.

BRADLEY PETERSON: Absolutely. Thank you so much.

CATHY WURZER: We've been talking to Bradley Peterson, the executive director of the Coalition of Greater Minnesota Cities. Of course, we had our reporters up at the Capitol all weekend long. It was a long weekend. Dana Ferguson was, of course, there all night long. She joined us earlier this morning. You can check out Dana's reporting by going to mprnews.org.

Clay Masters is up there and, of course, Brian Bakst, our political editor. We have all kinds of stories ready to go about what happened and why or what happened or did not happen and why. So keep it here for your political news on MPR.