County invites City to parley on Community Center

Cook County Commissioners and representatives from ORB Management want to sit down with the Grand Marais City Council and try to find a way out of the community center impasse. The city has a contract with Burbach Aquatics that was negotiated in June, 2005, and obligates them to use Burbach for the repair, replacement or renovation of a city pool.

Commissioner Sue Hakes chairs the Community Center Steering Committee.

“The city brings expertise and they bring financing for the project, and they’ve got this issue with Burbach Aquatics that has precluded them from participating because a contractual arrangement they made a six or five years ago.”

Former city councilman Ed Bolstad said that at the time there was no thought of a one percent sales tax and Burbach Aquatics had the best plan.

“At the time there was no dream of the one percent money or anything else, it was the city that had to think about trying to do. We put out the standard open-to-bid for companies. Burbach was the one seemed to have the most on the ball – a bit grandiose in what they thought could happen. So, we entered in – after a lot of discussion and a lot of presentations – entered into whatever the legal term is, for them to proceed further with drawings and things like that. And should we ever decide to build or do anything major the agreement would be that we would do it with Burbach. Went on with it, never settled on anything we were going to do, never signed anything that I recall said in fact this is the design we’re going to go ahead. I suppose it’s fair to say that in my own opinion, I thought many times he (Burbach) came over, the plans seemed to get a little more grandiose…like an outdoor slide and that kind of thing.”

At least three pool scenarios were presented to the council, with three different price tags. Costs ranged from a $2 million renovation to a nearly $6 million dollar new building with a projected 50-year life span. Mark Sandbo was the Grand Marais Mayor at the time.

“The cost was relatively high, of course as we find now, all construction costs are high, but I really believe it was too high. The city at that time was not in a position to afford the scope of the project that they were talking about. It was put on hold, basically. There was no action. There was nothing that said ‘no, don’t do it, yes do it,’ there was just kind of, ‘let’s look and see what else was coming down the pike,’ if there was anything else. At that time there was nothing even thought of, the one percent wasn’t even thought of.”

A pool is part of the new community center proposal. The contract between Grand Marais and Burbach states if the city enters into any agreements with other entities – such as the county – the terms of the contract still apply. Burbach was not chosen by the county to design its pool. According to Burbach, that means for the city to enter into any agreement with the county regarding a pool, is a breach of contract. That could cost the Grand Marais upwards of $325,000 plus collection and attorney fees.

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. City Administrator Mike Roth points out that the pool costs the city much more than it takes in for revenue.

“In 2009 we spent $292,000 operating the pool. We received $69,000 in revenues and then we received about $10,000 from the county to help out with the operating loss, which netted us out at $213,000 of operating loss. Now in 2010 the county began reimbursing us for a third of the operating loss, so we received $71,000 from them and the operating loss was $135,000. For 2011, I guess our budget we expect to spend about $298,000 for operating the pool and receive $60,000 in revenue.”

In an attempt to end the stalemate, a working session with the city has been proposed by the county for 10 a.m. on August 23. As the county sees it, there are several options to explore.

The county could work with the city to effect a settlement with Burbach using legal and financial contributions. They could suspend or terminate the community center project until the city is able to participate – a position the county board has already taken.

Other options would be to eliminate the pool from the project, thereby keeping the city involved -- or to forge ahead without the city and redesign the facility to work within county-only financial parameters.

Another option also exists. The county and city have recently contacted Burbach about joining the community center project through a Professional Services Agreement. That could satisfy some – but not all -- of what the original contract called for.

Burbach responded to the joint request with three Scope of Service options. One would essentially replicate their original role in design and construction services and meet the elements of the 2005 contract for a cost of $861,000. A second option, which would not meet original contract standards was offered in “the spirit of negotiating a mutual beneficial agreement.” That cost would be $212,000, but Burbach added in the breach of contract fee, bringing the cost up to $536,600.

A third option – one suggested by the county – would be for selected services to be performed for $115,000. But, again a breach of contract fee was included, bringing the total to $488,000.

Commissioner Hakes said the up-coming meeting is important to find a way toward solving the impasse.

“We are going to discuss that, we are going to explore ways to get them on board. I know the county would really like them to be on board, and have actually made that a contingency to moving forward. So we’re hopefully going to get to the bottom of it and talk about some options.”

For the time being, the Community Center Steering Committee and ORB Management will continue to work toward a decision on the best site for the new facility. Once that’s decided, the project will go on hold until some solution to the contract problem can be found. That process could begin August 23rd.