A good-sized crowd gathered at Silver Bay’s new Multi-Modal Trailhead Center this past Monday, curious for answers about the currently in-progress Phase 1A of the 2026 Citywide Street & Utility Improvements Project. This project, in the works by the city for years, is doing a wide-scale replacement of Silver Bay’s aging infrastructure, including watermain, sanitary sewer and storm sewer, as well as roadways, curbs, sidewalks, and driveways. As part of funding for the project, special assessments will soon be approved, or not, by the City Council at their next meeting on September 8th. This hearing was the public’s official chance to ask questions or object to these upcoming assessments.
The meeting began with a presentation from Silver Bay City Engineer Josh Stier catching everyone up on the basics of the project and its special assessment before fully opening to public comments. In short, the special assessment given to at least most residential property owners within the current project area will be $9,500, payable over 15 years at 6.25% interest. Stier, City Administrator Lana Fralich, and the City Council answered several questions regarding the details.
The assessments are based on an Equivalent Residential Unit (ERU) basis, with a single-family home being one ERU. Stier prefers this policy to another common method based on frontage, saying “this is a more fair, equitable way, I think, of doing it.” Using this method, the proposed assessment has one ERU equal to $9,500. Under this system, larger commercial properties would be more than one ERU. According to Stier’s presentation, for property owners with more than one developed lot, one ERU will be assigned. Property owners with an underdeveloped buildable lot will also have an ERU assigned or record a 20-year restrictive covenant precluding the development of said lot. Those on corners will only have one assessment applied; in the case of utilities coming out at different roads, the property will be assessed on whichever of the roads is worked on first.
The assessments follow Chapter 429 of Minnesota State Statutes, which allows Silver Bay to assess a portion of the project costs back to the benefiting property owners. Asked how they came up with the number for assessments, Fralich explained that ideally most utilities pay for themselves, but not streets, which is where assessment comes into play. Stier displayed a spreadsheet showing the cost split for the project, explaining that after taking out amounts paid for by the state and grants, it leaves $4 million, times 20% for general obligation bond requirement, divided by the 66 properties affected, which would be just over $12,000 as the assessment amount. The end assessment, however, is lower at $9,500 because no bonds were used for this project, as bonds would have raised assessment costs. Stier stated that “If we were bonding or borrowing to pay for this project, we would legally have to assess at least $12,500.”
Their goal with the payments, Fralich said, was to be fair and not overcharge; they will not charge more than $9,500 per ERU even if project costs end up higher than estimated. The proposed assessment of $9,500 per ERU, or an augmented number if needed, will be made final once adopted by the City Council. Provided there are no major complications, the City Council should approve the assessment this next Tuesday, September 8th.
There are a few complexities with how this assessment can be paid, with City staff taking pains to ensure residents understand the process. Until November 16, 2026, those with assessments can make their payments at City Hall to the City of Silver Bay. Any amount paid up to the $9,500 total made by November 16th will not have any interest attached. Fralich noted that paying in full in advance in one step would be ideal “for ease of tracking” the assessment status of property owners, but making multiple payments before November 16th was also fine. If unable to pay the full $9,500 before November 16, property owners can also pay off a portion to avoid paying interest on the full amount: for example, paying off $3,000 before November 16th would mean only having to pay interest on $6,500 instead of the full $9,500.
From November 17th through December 31st, property owners will NOT be able to make any assessment payments. This is because any remaining unpaid assessments will be in the process of being transferred from Silver Bay to Lake County, with Fralich emphasizing that “the County won’t accept the payment, nor will we.” Interest on the assessments will go into effect on January 1, 2027. After that point, property owners will have their payments, with interest, tied together with County property taxes, payable twice a year by May 15 and October 15, or escrow accounts if paying escrow. When making those payments, they can choose to pay off a minimum amount up to the remaining assessment if they wish to avoid adding more interest. If paying off in full, it was recommended to do so prior to November 15th of that given year to avoid being charged interest for the following year.
Although there was not an immediate number available for what it would cost to pay the assessment per year without prepayments, affected residents will receive an information packet from the City later this month, after the City Council approves the assessment.
Deferment options for the assessments are as follows: be a homestead property owner 65 years or older, or retired by virtue of perm/ total disability, or active military service, and in addition to one of those factors also meet a standard for financial hardship which will be detailed in the City’s information packet. Fralich warned that even if assessment is deferred, it will continue to add interest year by year, meaning the deferring resident would have to pay more the longer the payment is delayed. Those applying for deferment must do so at City Hall by October 15 and be approved by the City Council. Deferments must also be reapplied for annually.
For those unable or choosing not to pay off in full before November 16, Fralich recommends checking with local lenders to apply for a loan at a lower interest rate than the default 6.25%. Another advantage is that it would allow for smaller monthly payments rather than being limited to paying with property taxes twice a year.
Apart from covering the special assessments, the presentation served as an update on how the project currently stands. As a refresher, construction for the project has been ongoing since June and is taking place on the uppermost stretch of Banks Boulevard, the section of Adams Boulevard connecting to and north of Banks, and Arthur Circle. As of this meeting, the project is approximately 50% complete, with Stier noting that the elements remaining, such as adding new pressure-reducing vaults, should have a less direct impact on residents. 75% of the utility installation is complete, with most of the sewer in and water and storm sewer coming along. As part of construction, the main sewer line is, in general, being moved to the middle of the street, making it easier for crews to access for further repairs and construction with a minimum of disturbance to other utility lines and nearby private properties.
Stier anticipates most of the utilities will be installed in the next two to three weeks, after which they can start rebuilding the remaining roads. 10% of roadway construction is complete so far, and Stier ran down the checklist of grading, putting gravel down, curb and gutters added, sidewalks, then paving with blacktop, stating “it’ll go quick once they start building the road in.” He warned there was a good chance the roads would not be paved before winter, depending on the weather, but would be maintained gravel instead. It was confirmed the new sidewalk will be a 5-foot minimum for ADA compliance on the inside of Arthur Circle, while parking will be as it was before construction. There were concerns from several residents over driveway/apron sizes, as the plan is to construct 16 ft driveways, but the current size of several driveways is larger than that. Several members of the Council debated possible solutions, but there was no confirmation on how the situation will be handled at this time.
Box culverts are planned to be installed in November with the goal of installing during dry, but not yet snowy, weather. He confirmed their installation would take about a week and be done by the same company doing the rest of the construction, A-1 Excavating, LLC from Bloomer, Wisconsin.
A-1 Excavating, LLC garnered a number of compliments during the meeting, with Council, staff, and residents praising the engineering and construction work so far and calling them professional, hard-working, responsive, and conscientious of those in the construction zone. There were concerns over the lack of ability to leave houses during construction, especially during emergencies, with Stier telling residents needing 24/7 access to contact the city and request accommodations.
Grass and tree replacements in the construction area are planned to an extent. Stier noted grass will need watering after the construction crew is done and no longer maintaining it, and will take some time to grow to the level it was prior to construction. Emerald ash borer-infected trees will be replaced through a relief grant, but it may take some time. Although they do intend to line the boulevards with trees, Fralich noted there will likely not be as many trees as there were before to ensure they will not interfere with utilities. New trees planted must also meet city and state standards to ensure there is a healthy variety of species for the area.
A new pressure reducing station will be at the intersection of Banks and Adams, replacing two 70-year-old deteriorating underground pressure reducing stations that, according to Stier, “are one chipped piece of metal away from a major catastrophe,” commenting further that “It’ll be a nice looking building, it won’t be an eyesore.”
In response to audience questions, Stier gave some estimates on how long new materials will last, listing that PVC used for water mains and sewers should be around 100 years, though concrete manholes will wear out before then and need to be replaced in the meantime. Watermain fittings are epoxy-coated steel with anti-corrosion properties and should also last about 100 years. Finally, the street will last about 30-40 years, meaning it should get redone at least twice before utilities will need to be replaced.
When asked, staff commented that a timeline for future parts of the project beyond Phase 2A is difficult to plan given rising costs and the need to apply for funding. “Costs are double what they were when we had the plans engineered,” Mayor Wade LeBlanc said. Relatedly, Stier warned future projects would likely not be able to rely on as many grants for infrastructure funding, which might lead to a need to borrow money, which would in turn raise assessment costs for future phases of the project. Phase 1A, for the record, is being funded via the Minerals Article Act, a Minnesota Pollution Control Agency (MPCA) Stormwater Resiliency Grant, Minnesota’s Public Facilities Authority (PFA) Water Infrastructure Funding, and Lake County’s Highway Department, with City reserves used to cover remaining project costs as needed.
As the meeting began to wrap up, Fralich thanked everyone for being respectful and, along with several other residents, gave a special thank you to Steve and Nancy Clark for the use of their property.
