Taxpayers in Tower should sit up and take notice. The city council is poised to approve a construction bid as early as next week that could require bonding of as much as $600,000 as part of a project to add seven new RV sites at the Hoodoo Point Campground.
We should make clear that we support the addition of new RV slots at the campground, if it can be done affordably. Allowing more people to spend time and money in our area helps our local businesses.
This proposal seemed perfectly sensible at first, but as more discussion ensued, the costs began to spiral, particularly when the city decided that the additional RVs would overtax the capacity of the existing sewage treatment system, which is clearly aging. That began a push to replace major components of the system and to extend the city’s sewer line out the campground. The council rejected the first round of bids after the low bid included a significant math error and the next lowest bid came in at over $600,000— which did not include the cost of remaining design engineering, construction oversight and inspection, and contingencies. Even the lowest bid was well above the engineer’s estimates for the project. That, by itself, should have prompted reconsideration of the project, but the city requested new bids, which are due Oct. 27. The council, as of this week, is planning to award bids at a special meeting next week.
The city plans to issue a revenue bond for the project, but it’s unclear that additional revenues will actually cover the annual bond payment, which is likely to exceed $40,000 depending on the interest rate of the bond. A summary budget, prepared for the council, suggests the campground will earn an additional $13,900 from the RV sites. The budget also assumes that the city will raise seasonal camper rates by $200, monthly rates by $150, and nightly rates by two dollars, which would raise an additional $17,100. That’s a combined total of $31,000, which leaves the city approximately $9,000-$12,500 short. The rest will come from other campground proceeds, which otherwise help to offset some other city spending.
We recognize that the city will likely have to address the aging sewage system at the campground in the near future to prevent contamination of groundwater or Lake Vermilion. But we think that those improvements should be part of a broader strategy that could encompass a broader swath of Lake Vermilion shoreline. That’s the kind of project that could generate public grant dollars. The state of Minnesota has poured millions of dollars into sewer projects on lakes up at the border. The city of Tower would have an excellent argument for similar investments on Lake Vermilion, which could deliver far more bang for the city’s local dollar investment. The city should put the brakes on at least portions of this project and take the time necessary to explore more cost-effective alternatives.
If this were the only major capital investment under consideration at city hall, our discomfort level wouldn’t be as high. But the city is actively exploring construction of new facilities or significant renovations to existing public buildings— projects which are certain to entail significant additional bonding.
At the same time, the city has committed to funding the cost of new roads and water and sewer for the harbor project. While the city has obtained $350,000 from the IRRRB to help pay for some of that work, the city will very likely ultimately be responsible for hundreds of thousands of dollars in additional costs, which it appears will be covered by additional bonding. The city is also looking at upgrades to water mains.
We certainly recognize the need for cities like Tower to invest in their futures. But they also need to prioritize, because money doesn’t grow on trees. At this point, finishing up the harbor project has to be priority one. Replacing the fire and ambulance storage building lost in a fire a few years ago is probably second on the list. Adding seven new RV sites at the campground would be nice, but it’s hardly a top priority, and certainly not at the present price tag.
The city should take a breather, explore its options, and look for potential outside funding sources before moving ahead.