TOWER— The city council here had questions over the handling of the trailhead project near the city’s harbor and cost overruns that forced significant cutbacks in the project as well as the tapping of contingency funds from a related road extension.
The questions arose as the council was faced with approving a $237,168 change order as a result of soft, wet soils discovered once excavation began on the driveway and new parking lot being built along the East Two River, just north of the Hwy. 169 bridge.
“Isn’t it customary to use soil surveys prior to this kind of work?” asked new council member Josh Zika.
City engineer Matt Bolf agreed that such tests are typical, but he said the lack of road access and tree cover on the site complicated any soil testing. He also said that the city couldn’t use funds approved by the Legislative Citizens Commission on Minnesota Resources, or LCCMR, to pay for soil testing, since the project needed to be approved before any reimbursable funds could be expensed.
The lack of testing came back to bite in this case, as additional soil removal and refill added nearly a quarter million dollars to the cost of the project. “So certainly, hindsight is 20-20,” said Bolf. “This is not an ideal situation to be in,” he acknowledged.
Bolf said the entire area was “not conducive” to a city road but that under the circumstances, they opted to dig out the soft soils down to about ten feet to ensure that the road and parking area would hold up. In order to cut other costs, city officials opted to reduce the size of the parking lot and eliminated the plan for lighting at the site, which will include a trail kiosk and a kayak and canoe launch.
Those deductions helped trim the project cost by $152,664, still leaving an $84,504 estimated cost overrun. The city will cover that extra charge with contingency funds from a related $461,900 grant from Iron Range Resources and Rehabilitation, although that will all but eliminate the $90,000 in contingency funding incorporated into that grant. The IRRR funds are earmarked for construction of an extension of Main Street that will provide access to the new trailhead as well as a “green flush” toilet proposed for installation near the civic center and a few other minor improvements. Schultz said the road extension is the higher priority and he is concerned that if contractors run into similar soils underlying the new road, it could easily consume all of the IRRR funds allotted to the project. “It’s a tricky situation to be in,” said Schultz.
Mayor Dave Setterberg noted that the decisions that led to the current situation were made back in 2017, under a prior administration. A series of cost overruns and mistakes on project budgeting over the years was the primary cause of the city’s financial crisis, which came to a head in 2018 and 2019.
In other action, the council approved a request to apply to participate in an 18-month “Housing Institute” being sponsored by the Minnesota Housing Partnership. According to Brad Gustafson with St. Louis County community development, the Housing Partnership is interested in setting up four cohorts of city officials in northeastern Minnesota to take part in the institute. “I highly encourage Tower to apply to be a team!” wrote Gustafson in a Dec. 23 email. “This is a great opportunity to help move a housing project forward!” he wrote.
Clerk-Treasurer Michael Schultz noted that participation in the institute will likely entail a significant time commitment, but said that the costs associated with the institute will be covered by the Housing Partnership.
“It would be a way to work collaboratively on housing,” said council member Joe Morin. “It would help us learn the process.”
In other business, the council:
• Approved committee appointments and designations for 2023, with few changes from last year. Robert Anderson will replace council member Kevin Norby on the ambulance commission. Joe Morin will remain as acting mayor.
• Approved the hiring of Chas Hanna as the city’s seasonal maintenance worker, starting at $13 an hour.
• Approved a two percent increase in hangar lease rates for 2023, the first change in lease rates since 2015. In a memo to the council, Schultz recommended that the city research whether the current lease rates are appropriate and in line with other regional airports.
Council member Robert Anderson said his own research suggests that the rates are too low, particularly given that hangar owners get to make use of additional airport space beyond the footprint of their hangars. The current hangar leases allow for a two percent annual increase in the lease rate.
• Heard from Mike Korpi in support of the installation of a “love lock” near the Tower-Soudan Elementary School in honor of longtime teacher Carol Alstrom, who was influential with many students. The council noted that the decision on the monument was up to the school district, since the memorial would be on school property. The council agreed to continue to explore the possibility of making that portion of Spruce Street in front of the school a commemorative street in honor of Alstrom.
While councilors expressed general support for the idea, Mayor Dave Setterberg questioned whether the council wanted to establish a standard for naming city streets or other facilities for prominent members of the community. “I’m not against it, but what’s the threshold that must be set to do something like this?” he asked. Schultz said he would do some more research on the issue and report back.
• Approved the purchase of a new refrigerator for the civic center kitchen.
• Approved some minor updates and changes to the operating procedures for the ambulance service.
• Gave the first reading to a change in the zoning ordinance that designates the Planning and Zoning Commission to serve as the city’s Board of Adjustment in the absence of a designated BOA.
• Heard that the city is still waiting for clarification on a legal description for the transfer of the civic center area and mini-park from TEDA back to the city.