The Shell Rock River board of managers on Friday initiated the process for issuing an approximately $1.8 million bond that is expected to include an approximately $168,000 property tax levy.

The board of managers unanimously initiated the process of issuing the bond, which would be issued so the district could proceed with the first phase of the project, which would remove 550,000 to 690,000 cubic yards of sediment from Edgewater Bay. District officials said the tax levy provides a secure source of income to ensure bond payments will be made.

The bond would be issued after a credit process is completed and an interest rate is finalized.

Manager Gary Pestorious said though the district would like to eliminate the property tax as soon as possible, “today, we have to initiate it, because of the cash flow.” He said bonding will allow the district to prepare for confined disposal facility sites two and three and the second dredge contract.

The CDF  — north of Interstate 90 and 1 1/2 miles north of Fountain Lake — will house sediment gathered from the bottom of Fountain Lake.

A levy of around $168,000 has been estimated to increase taxes $6 on a home valued at $100,000. The expected property tax levy increase on a $200,000 home has been estimated to be $15, and the property tax is expected to increase taxes about $40 on an 80-acre parcel.

Administrator Brett Behnke said the district will have to decide whether to implement the tax by the end of July so Pat Martinson can evaluate its budget before September. 

“Everything needs to keep moving for us to be successful,” he said.

The Freeborn County Board of Commissioners in April petitioned the district to move forward with the first phase of dredging, opening the door to the entity to implement the property tax levy. 

Project bids will be released once permits are secured, which is expected this month. A contractor could start building the pipe that will transport sediment from the bottom of Fountain Lake to the site of the CDF this year.

The district has spent about $2 million on the dredging project so far, Behnke said, and plans to spend about $1.5 million on constructing the CDF, as well as about $200,000 in engineering costs — leaving about $3.8 million in state bonding. Bids for the project need to be received for an exact project cost to be formed, Behnke said.

The district this week received legislative renewal for the half-cent sales tax to be extended for either 15 years or until $15 million has been collected for the project for water quality improvements, including the dredging project. The Watershed District had been looking to the tax levy option as a possible solution to the delay in the Legislature.