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BE Council OKs Fitness Center bid

By Staff | Aug 25, 2013

It took several tries, but the Blue Earth City Council eventually passed a motion to proceed with an expansion project at the city-owned Faribault County Fitness Center.

However, they postponed a decision on how, exactly, to pay for the project.

The council said OK to a proposal from Ankeny Builders of Blue Earth to design and construct the expansion at a cost of $497,169.

The only other proposal came from United Builders of Blue Earth at a cost of $580,597.

Both cost proposals were below the estimated cost of $625,000.

The council was also looking at three options on how to pay for the expansion.

One was to self-fund the project using city reserves. Another was an abatement bond, which uses a designated amount of city tax revenue. The third option was to have a revenue bond.

In all three cases, the payment of the total cost would be spread over 20 years and the annual payment would come from the profits of the fitness center.

“They (the fitness center board) sold me on the project because they say the revenue will pay for the expansion,” councilman Glenn Gaylord says.

He made the motion to proceed with the lower bid and to use a revenue bond to fund it.

However, councilman Dan Brod questioned why use a revenue bond when it would mean more in interest payments.

An amendment to Gaylord’s motion was to change the revenue bond to an abatement bond, but it failed for lack of a second.

A second amendment, to just accept Ankeny Builder’s bid for the project without any designation on how it would be funded did pass.

“I think we need to take our time on this (how to fund it),” Brod told the other council members. “I don’t want to rush into this. I think we should study it more.”

Others agreed and they postponed a decision on the funding until a council meeting in September.

A report from city administrator Kathy Bailey showed the payment for the fitness center expansion would be approximately $34,492 per year.

The report added that she expects $38,417 would be available for a payment.

Budget reports show the fitness center showed a profit (revenues over expenses) of $23,904 in 2010, $42,522 in 2011 and $56,853 in 2012.

This was not the only issue at last Monday’s council meeting that required an amendment and more than one vote.

A decision on when to hold an assessment hearing for the Gorman Street project was changed several times.

A motion to hold it first on Sept. 16 was later amended to holding it Sept. 23. And the motion was also amended to change the location from the City Hall to the Public Safety Center building.

Another motion to pass the lease agreement between the city and the Faribault County Humane Society for the operation of the animal shelter/pound also was amended first.

The amendment had to do with taking out the amount of the fees paid by the city to the humane society so that the amount can easily be adjusted in the future without redoing the entire lease.

The amendment passed unanimously, but councilman Gaylord was a dissenting vote on the matter of the lease itself.

The lease will agreement will now go to the humane society for their possible approval at their next meeting.