The Minnesota Public Facilities Authority awarded a $1.24 million loan to the city of Dassel Monday, Nov. 24, to pay for improvements to its municipal drinking water infrastructure.

The low-interest loan is from the PFA’s Drinking Water Revolving Fund. It will pay for demolishing an existing water tower, building a new tower, connecting the water system to the new tower and modifying pumps at the water treatment plant.
 
The loan was approved at an interest rate of 1.02 percent over 20 years, saving the city $402,600 in interest costs compared with issuing market-rate debt for the same amount.

“Helping communities improve their water services is an important part of the mission of the Public Facilities Authority,” said Dan McElroy, commissioner of the Minnesota Department of Employment and Economic Development and chairman of the PFA. “Dassel will have a much-improved water system thanks to this low-interest loan.”

Sanne Magnan, commissioner of the Minnesota Department of Health, joined the PFA in announcing the loan.

“Making sure people have access to safe drinking water is one of the most important duties of public health officials,” Magnan said. “But safe water doesn’t happen by accident. It requires a strong infrastructure and constant vigilance. Loans provided through the revolving fund are an important tool for making that happen.”

Myles McGrath, Dassel administrator-clerk-treasurer, said the project is under way and is expected to be completed by October 2009.

The PFA has financed more than $2.5 billion in infrastructure projects since being created by the Minnesota Legislature in 1987. The PFA operates three revolving loan funds for infrastructure projects: the Drinking Water Revolving Fund, Clean Water Revolving Fund and Transportation Revolving Loan Fund.