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This compares with the engineer's estimate of $1.2 million for the project, which was used to compute the preliminary assessments for the project last fall. Though the final assessments will not be known until the project is completed and actual costs known, the low bids should mean that final assessments will be lower than the estimates.

This project includes reconstructing Koronis Avenue (from Highway 23 to Mill Street); reconstructing Washburne Avenue (from Highway 23 to Mill Street); reconstructing Pomeroy Avenue (from Highway 23 to South Street); reconstructing the western two-thirds of South Street; and overlaying the south end of Central Avenue. Reconstruction includes tearing out the pavement and replacing sewer and water lines under the street before rebuilding the pavement, sidewalks, and curbs and gutters.

The 11 bids ranged from a low bid of $905,021.67 from R. L. Excavating to a high bid of $1,405,521.51.

Before approving the Larson bid, the council was informed that this company has done two previous street projects in the city: the 1991 downtown street project and the 1994 sewer rehabilitation project.

The project is expected to start this spring and last into the summer.

Also last week, the city council approved purchasing general obligation bonds from Northland Securities in the amount of $1,140,000 to pay for the street project. Interest rates for the 15-year bond averages to a net effective rate of 4.29 percent for the city.

The estimated rate for residents who choose to pay their assessments over time is 5.5 percent.

To pay for the bonds, approximately $105,000 per year, the city will get an estimated $44,000 per year from special assessments, $40,000 per year from the tax levy, and $22,500 per year from water and sewer rates.

The city also expects to do a storm sewer project on Service Road, correcting the spring flooding problem in that area, in conjunction with this year's street project. The council approved creating plans for this project last week, which will be added to the street project as a change order.

The council also tabled a tree concept plan for Washburne Avenue, in order for city staff to talk with landowners on the block between Highway 23 and Mill Street to be affected by the street project.

The tree plan calls for 18 trees to be lost due to the street project and to be replaced with 30 trees.

The cost for planting potted trees in the fall is $4,500, while the cost for planting bare-root trees in the spring is $3,375.