November 5, 2012 – The city of New Prague (Aa3 / 648159UW9) just threw a party to celebrate completion of a state-of-the-art sewer plant. But the gathering that really means something to the city’s pocketbooks will take place soon in a conference room in St. Paul, where New Prague officials will ask the state to loosen the financial noose the $30 million project is tightening around the city’s neck. The plant is one of many built amid a turn-of-the-century explosion in the populations of rural towns on the fringe of the metro area. But the exurban boom has gone bust, leaving cities such as New Prague, Avon (Baa2 / 054177JQ4) and North Branch (Baa1 / 657764W36) struggling to pay for the facilities. Without help, Harris Mayor Diane Miller warned in a letter to the state, “the increases in debt service over the next several years will put the city in an untenable financial position.” The projects were supported by the Minnesota Public Facilities Authority, an obscure state agency that dished out nearly $350 million, mainly in low-interest loans, to help exurban cities build sewer and water projects. When home sales plunged, cities found themselves with fewer-than-expected residents to help foot the bill. That’s forced many of them to jack up their water and sewer rates for current homeowners and businesses.
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