It didn’t take long to knock down the silo at the school last Friday, September 14. The silo was used to store wood chips that at one time were burned to heat the school. The biomass heating plant was closed in the mid 1980s because too much smoke was generated throughout town when the plant was in use. The silo was taken down to accommodate the proposed community center.
Before builders begin construction on the proposed Cook County Community Center project, there are myriad details to be hammered out by the project partners—Cook County, the city of Grand Marais, School District 166 and the YMCA. On Tuesday, September 18, county board members met with representatives of the city trying to nail down the particulars of the project.
Consensus at end of city session
The full county board met with the full Grand Marais City Council at 2 p.m. in the county commissioners’ room. The meeting began with the city presenting a list of its parameters for participating in the project. The first two of the six items brought the most discussion. The city’s document said it would participate in the operating loss based on a percentage split, such as 50 percent—capped at a firm number such as $100,000.
City Councilor Tim Kennedy explained that the city wanted a plan in place in case operating costs accelerated. “If instead of $180,000, we’re looking at $250,000 – $300,000, we want a mechanism to handle that. I know everyone is doing all they can to keep these costs down, but just in case, we want this.”
Workers were surprised to find wood chips—or what is left of decomposed wood chips—still left in the silo. A good many pigeons were also displaced when the silo came down. Some waited until the silo was half down before flying away.
The city learned, said Kennedy, from the current Grand Marais pool. There was an agreement when the pool was constructed in 1977 that the expenses would be shared between the city, the county and the school, however there was no plan for inflation. “Costs kept going up,” said Kennedy. “There was no review and the city absorbed the cost.”
County Commissioner Fritz Sobanja said the county’s involvement with the YMCA should help with operation costs. Commissioner Bruce Martinson said there should be a city representative on the yetto be-formed YMCA board. City Councilor Bill Lenz asked the status of the county’s contract with the YMCA. Commissioner Sue Hakes said that is still being worked on too. “We need to know the details of what that is going to look like before we agree to that,” said Lenz.
Commissioner Martinson said he was opposed to the $100,000 cap. He said past recommendations called for the city to contribute what it was currently spending to maintain the swimming pool, approximately $150,000. “Going from $150,000 to $100,000 is a big difference. The county is taking all the risk. If we have a deficit of $300,000, the county takes the entire hit,” said Martinson.
“The taxpayers take the hit,” said Commissioner Jan Hall.
Kennedy replied, “Believe me, we know. We’ve been covering pool expenses for 30 years.”
The $100,000 cap, Kennedy said, was based on the financial estimates provided by Chris Francis of the YMCA, which show a deficit budget of $180,000 in the first few years of operation. “If you think the loss is going to be $300,000 in the first year, then you need to tell us that,” said Kennedy.
The YMCA five-year pro-forma statement provided earlier this year predicted an estimated deficit of $190,782 in the first year; $182,244 in the second; $175,13 in the third; $192,183 in the fourth year and $191,747 in the fifth year.
Commissioner Sobanja said he felt the YMCA’s budget numbers were “very workable.”
Commissioner Jim Johnson said, “We’re all assuming there will be a loss—there probably will be. But what if there is a profit? We’d split that 50/50.
“I’m comfortable with the $100,000. That number is from a reasonable source,” said Johnson.
Mayor Larry “Bear” Carlson said with a projected deficit of $180,000, the city’s contribution of $100,000 was “very generous.”
Councilor Jan Sivertson pointed out that one of the city’s suggested parameters was to develop an agreement similar to the arrangement the city and county have to jointly operate the Grand Marais Library, to “anticipate future growth of the cap.”
Under that agreement, the city and the county share operating costs for the library, which is owned by the city of Grand Marais. The city develops the library budget and if an increase higher than 5 percent is proposed, the county has the right to veto the budget and to work with the city to develop a budget the two entities agree on. “We need some kind of formula that’s fair,” said Commissioner Hakes.
There was some discussion of how that formula would work, whether an increase would be calculated using a percentage or the Consumer Price Index, but there was consensus that that could be worked out.
Three other parameters were agreed on. The county agreed to the city’s request to exclude the cost of the existing community center and grounds operations. The county also agreed to continue its current level of support for the Grand Marais pool. Commissioners said that was the plan. “It’s in our budget,” said Hakes.
And the county agreed to help the city with its “one-time expenses” pertaining to the pool. The county agreed to pay half of the city’s settlement costs with Burbach Aquatics. The city paid $57,500 to be released from its contract and accumulated legal fees to reach the settlement for a total of about $75,000. The county also agreed to pay half of the cost of the demolition of the swimming pool building.
How the county would reimburse the city for those expenses was discussed. Commissioner Hakes said the likely scenario would be that when the community center facility opened, the city would be billed for $100,000. At that time, Hakes said, the expenses for Burbach and the pool demolition would be deducted from the amount due. “They could end up owing us,” said Mayor Carlson.
The county asked for two things, the first, agreement from the city to help pay the personnel costs of the community center/ YMCA staff in the six months leading up to the opening of the community center. That cost is unknown, but Commissioner Sobanja estimated that the cost would range from $25,000 – $40,000. The city agreed to pay half of those costs.
Commissioner Hakes made the second suggestion, to have both entities contribute $10,000 a year to a capital cost fund. Councilor Kennedy said, “I think that’s a good idea. You’re building a multimillion dollar facility. $10,000 a year seems reasonable.”
The boards reached consensus on the eight items discussed and each will work with its attorney to draft an agreement.
Commissioner Hakes said the next meeting of the Cook County Community Center Steering Committee was scheduled for Friday, September 21 at the School District 166 Jane Mianowski Conference Room. Hakes said this is a “very important” meeting. She said $300,000 – $400,000 needs to be cut from the project budget.
City – County consensus found on the following items:
. City will participate in the operating loss based on a 50 percent split of costs.
. The total city’s participation in the operating loss is capped at $100,000.
. The costs of the existing community center and grounds operations are excluded from the city’s participation formula.
. The city and county will develop an agreement similar to the one in place for the Grand Marais Library, to anticipate future growth of the cap on the city’s contribution.
. The county will continue its current level of support for the swimming pool until it is closed or the community center opens.
. The county will pay half of the expense of the settlement costs with Burbach Aquatics (approximately $75,000) and half of the cost for demolition of the current pool building.
. The city agrees to pay half of the personnel costs in the six months leading up to the opening of the community center (estimated at $25,000 – $40,000.)
. Both the city and the county agree to contribute $10,000 per year to a capital cost/sinking fund for the community center.
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