KELLIHER -- Years in the works, the city of Kelliher is on its way to completing numerous upgrades to its public infrastructure.

All told, there will be more than $3 million invested into the project, which has come from a number of sources, including the Minnesota Public Facilities Authority, the U.S. Department of Agriculture, and the state Department of Employment and Economic Development.

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“Kelliher will have a significantly improved water and sewer system, thanks to this project,” Minnesota Department of Employment and Economic Development Commissioner Shawntera Hardy said in press release this week announcing some of the funding.

Hardy also serves as chairwoman for the Public Facilities Authority. “These upgrades will improve the natural environment and make Kelliher more attractive for businesses and families,” she said.

Part of the actual construction began last fall with the replacement of water and sewer infrastructure under Main Street. The work continued this past summer.

Aside from the underground pipe work, which includes new water and sewer infrastructure throughout the entire city, the project also will include several visible changes. A new water tower was installed this summer, although it has not yet been put online. The old tower, which is currently still in use, is scheduled to be taken down next spring.

Also, the Minnesota Department of Transportation did a repair project on the stretch of Highway 72 running through the city limits. That development alone was worth $1.74 million.

There also is a new water treatment facility under construction. Currently, the foundation for the facility’s building has been laid.

“There was just starting to show a lot of signs of wear and tear,” Kelliher City Clerk Treasurer Shelli Krueth said.    

Although much of the funding for the project came in the form of grants, the city acquired $711,000 in debt financing to undertake the upgrades. That was in the form of a 40-year loan.

The nature of that loan, though, should not impact property taxes in the small municipality. Instead, the city will repay that loan through increases in rates.

The city has increased its rates throughout the last seven to nine years after a rate study was completed. The last rate increase was two years ago. Krueth said the rates at their current level should be able to cover the debt servicing, as it currently stands.

In addition to the various state funds Kelliher received, Beltrami County also committed up to $420,000 for the project. Unlike some of the other funding sources, which were somewhat restricted in how they could be used, the county funding could be used wherever needed.

“That’s to fill in the gaps,” Krueth said about the funding from Beltrami County. “All these different government agencies have such restrictions on their money: they only pay this; they only pay that.”

The project was a long time coming for some of the improvements. Krueth said city officials had been working on the upgrades, in some form of the planning process, for approximately the last 10 years. The water tower alone is more than 100 years old, having been installed in the early 1900s.

“It’s been a collaborative effort,” Krueth said about the project. “It’s been a very long process trying to get the funding.”