The county is in a bit of a pickle over the proposed new Community Center. For the facility to attract the maximum amount of participation to pay for ongoing operational costs, it needs to include a pool. To pay the annual losses municipal pools incur, the county needs the City of Grand Marais to contribute financially. The City of Grand Marais will not participate until it is free from a contract with Burbach Aquatics, made years ago when the city was looking into rehabbing its municipal pool, that requires the city to refrain from funding any new pools that do not pay Burbach for design services.
Unanswered is the question of whether the language of the city’s contract with Burbach, signed in 2005, really obligates the city to Burbach at this point, but Burbach has threatened litigation if the city participates in the proposed community center project. Until the city is no longer under threat of litigation from Burbach, the county’s community center project is likely to be on hold. To try and figure out what to do about this, the county board and the city council met for a work session on August 23, 2011.
The city’s contract with Burbach requires a period of five years between suspension of any pool projects and entering any new pool design agreements with other firms – or even contributing to another entity’s project. City Administrator Mike Roth said the city informed Burbach in February that its pool project had been officially suspended.
Options
The two groups considered several possible ways to handle the situation: They could involve Burbach in the design of the new pool, settle with Burbach by paying a sum agreeable to Burbach, terminate the community center project until the city’s obligations to Burbach are over (by February 2016 at the latest), build a new community center without a pool (and potentially use 1 percent money to rehab the city’s pool), or build the facility with the pool but without help from the city.
Commissioner Jim Johnson wondered if a significant group of people in the community would like to see the pool remain where it is. No one has approached the city council with this opinion, Councilor Tim Kennedy said, but Mayor Larry “Bear” Carlson said a lot of people have told him they would like to see the current pool demolished and rebuilt right where it is in the tourist park. Johnson said he had heard the same thing.
Commissioner Sue Hakes asked those at the table to state whether they thought having a pool was important for the community. All the elected officials said they did, but City Administrator Roth said, “We can’t afford the one we have.”
Commissioner Bruce Martinson said he was disappointed that the school’s determination to ensure that kids get swimming lessons has declined over the years. The municipal pool began in 1977 with an agreement among the city, the county, and the school, all three agreeing to pay one-third of the annual operating loss, which was $5,000 apiece back then.
Councilor Kennedy said a pool is a recreational facility that will never pay for itself. “It’s going to cost to have that kind of amenity here,” he said. “I do think the community stands behind it.”
Mayor Carlson said he’s hearing from people who question the need for a new community center. “We might agree that we need a pool,” he said. “I’m not sure we all agree that we need a community center.”
The community just supported the idea in the 2009 referendum, Councilor Jan Sivertson said, by voting the 1 percent tax into existence. A new community center with a pool was one of the projects planned for the 1 percent revenue.
The legislation would allow for 1 percent money to pay for a standalone pool, Commissioner Martinson said.
“As a practical matter,” County Attorney Tim Scannell said, “you’re killing the community center without a pool.”
Commissioner Fritz Sobanja agreed, saying that a diversity of attractions would draw the people needed to make sufficient use of the center. He envisioned members having key cards that would allow them to get into the building even at midnight to play basketball.
By including numerous community amenities in one building, Attorney Scannell said, “you could do better, cheaper.”
One idea, Sue Hakes said, would be to have a pool that included a community room, a kids’ party room, and an exercise room. She asked Administrator Roth how much it would cost to rehab the current pool, which has problems with moisture and failing equipment and infrastructure. Roth said Burbach has estimated that a 10-20 year fix would cost anywhere between $250,000 and $2 million.
Dealing with Burbach
“We’re letting Burbach hold this community hostage over what I consider nonsensical language,” Scannell said. Commissioner Martinson said the community center’s architect, Tim Meyer, said they could hire Burbach to design the aquatics portion of the new facility. Attorney Scannell said they approached Burbach with this idea, but the price Burbach quoted was “multiple hundreds of thousands of dollars.”
The city’s attorney, Chris Hood, was at the meeting by speakerphone, and he said he thought negotiations with Burbach could be explored further.
“Why not do arbitration?” Commissioner Hakes asked.
Scannell said he thought a “reasonable person” looking at the situation would favor the city and be unlikely to think that Burbach should get the amount of money a settlement would involve. Attorney Hood said, “I believe the record would show that there has been no breach.”
Roth said Burbach suggested a settlement of $350,000—what the city would have paid the firm to design a pool. Scannell said Burbach proposed between $488,075 and $861,250 to design the pool in the proposed community center—basically 8 percent of the entire project cost.
“Those numbers are pretty high,” said Sobanja.
“They’re really high,” said Scannell.
The longer they keep the project on hold, Hakes said, the more construction costs will go up.
Martinson asked the council whether they would be willing to participate financially in operating costs at the level they have been paying out for the current pool if legal issues could be ironed out? Kennedy responded, saying they “haven’t been able to go there” in their discussions because of the threat of litigation from Burbach.
The county board passed a motion authorizing Tim Scannell and Chris Hood to approach Burbach’s attorney to see how they could involve Burbach in the project or get out of the contract. Mayor Carlson said they would make the same motion at their next city council meeting.
Chris Hood said, “We are in no way, shape, or form admitting any liability in negotiating with [Burbach].”
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