City and county meet to grapple with swimming pool problem

County commissioners and Grand Marais council members held a work session Tuesday afternoon in an attempt to find a way to end the community center pool impasse. The city has a contract with Burbach Aquatics that was negotiated in June, 2005. Because the contract was never formally terminated, Grand Marais may be obligated to use Burbach for the repair, replacement or renovation of a city pool.

An aquatics center is part of the new community center proposal, but Burbach was not chosen by the county to design its pool. If Grand Marais enters into any design or operating agreement with the county they could be in for a lawsuit that might cost them upwards of $325,000.

The county not only wants city input and participation in its pool planning, it also wants guarantees that the city will continue to be financially involved in a new pool, much the same as it has been with its own municipal pool. The problem is the pool is not a money maker. City Counselor Tim Kennedy:

“A swimming pool is a recreational amenity that the community provides. It doesn’t make money, it doesn’t pay for itself no more than a ball field pays for itself. It just happens that a pool costs more to maintain and operate.”

City Administrator Mike Roth said even with county help, the pool is a losing proposition. “For 2011, I guess our budget we expect to spend about $298,000 for operating the pool and receive $60,000 in revenue.”

Still, the commissioners and council members agreed that a pool was an important feature of the community center plan. There was some speculation in the community whether the one percent sales tax money could be used to fund a stand alone pool. County Attorney Tim Scannell said he’d reviewed the legislation.

“I believe this legislation allows you to go forward with somehow renovating or otherwise building a stand alone pool. Having said that -- as a practical matter you’re killing the community center without the pool.”

Members discussed a number of avenues allowing them to proceed with the community center, including continued negotiations with Burbach Aquatics to bring them into the project as design consultants. Commissioner Jan Hall asked if an agreement was even possible. Scannell wasn’t especially hopeful more discussions would be fruitful.

“We know they would agree to do something, it’s just going to cost a lot of money. Yes, a lot of money, like multiple hundreds of thousands of dollars – at least that’s per our dialog with them. What’s frustrating is all of this conversation is interesting, but we wouldn’t be having any of it but for the fact of that contract. We wouldn’t be visiting this issue of the pool, we would be moving forward on the community center project and what’s really frustrating to me is that we’re basically letting Burbach hold this community and this project hostage over what I see as nonsensical language in the contract. I mean I understand there are different ways to interpret any set of words you want, but we need to get that behind us.”

Commissioner Hall pushed the issue further. “Legally, can we fight that? The city, the county, whoever’s going to…I mean if you took it to court, you would think someone, or whoever would be listening to it would say, ‘this is ridiculous.’”

Grand Marais City Attorney Chris Hood had been following the discussion by speaker phone and brought up a couple of approaches, in the end one tactic seemed to rise above the others.

“The other potential issue there is the contract calls for as its remedy, arbitration for disputes under the contract. So, on the one hand we would have to contend with that arbitration clause so we may be in arbitration anyway seeking some clarification or declaration by the arbitrator of rights.”

Both Scannell and Hall endorsed the arbitration route as easier and less costly than other options. Scannell said it made sense. “A reasonable person looking at the situation is going to find in favor of the city regardless whether there was an explicate notice of suspension, given how long this has been out there.” Scannell added that even if an arbitrator would not find entirely for the city, they won’t say the breach of contract should be awarded, but a lesser figure.

City Attorney Hood agreed with Scannell. “At this point I strongly feel there’s been no breach.”

Details of when and if the city formally terminated the pool project still need to be worked out, long-term inactivity may work in favor of a settlement through arbitration. Scannell said it doesn’t seem as though a contract can go on for ever. “I don’t know the provision off the top of my head, but I’m sure there’s a provision out there that says you can’t in essence hold a governmental entity in a contract in perpetuity or something. Maybe we don’t quite get there, but it sure looks like it’s getting there, given this contract was signed seven years ago.”

By meeting’s end it was agreed that either Burbach works with the city and county, the governments go into arbitration to end the contract, or the entire project ends. Commissioners moved to allow attorneys Scannell and Hood to further negotiate with Burbach’s attorney; the city council will move on the issue at their Aug. 31 meeting.