Council to decide funding for liquor store project

Talk about it

Bids for the long-awaited renovation and expansion project at the city-owned Silver Bay Lounge and Liquor Store will be opened Feb. 19.

In the meantime, city officials still need to decide how to pay for the estimated $754,000 project. Questions about whether the project was bid out in phases or as a single bid package also need to be straightened out.

Former city administrator Gary Brumberg, filling in until a new administrator is hired, provided the council with an update to the project. He said that he would find out Wednesday just how the project was bid out. The council will then meet on Thursday in a special session to get that information and decide the funding issue. The council had been looking to utilize some of the revenue in the liquor fund to help pay down the project and borrow for the rest.

Brumberg explained that the revenue fund currently had around $700,000 available and recommended that the city not spend more than half of that amount. He suggested utilizing $350,000 from that fund and informed the council that The Lake Bank was willing to work with the city to finance the remainder.

There was some discussion by council member Steve Marolt about simply borrowing the entire amount and leaving the liquor fund alone, since revenues at the site appear to be able to cover the cost of the loan.

“It seems to be near a wash,” Marolt said.

The funding package will be determined Thursday.

Regarding the bids for the project, liquor store manager Tom “Charlie” Byrnes told the council he thought the package was to be bid out in three separate phases, reflecting the renovations to the off-sale liquor store, the lounge area and the proposed 1,000-square-foot addition to the lounge.

All told, the proposed project would replace the flooring in the building, replace aging refrigeration, air exchange, air conditioning and heating equipment, windows, redesigning the bar area, adding more floor space and additional space for a dance floor.

The first two phases would be completed by Memorial Day and the third phase, which sounded as though it could be optional depending on the cost of the bids, was expected to be completed by Aug. 15.

“The addition is crucial due to the expansion of the off-sale space,” said Byrnes.

In other council business:

• The council amended a resolution to reflect the starting date for the collection of the city lodging tax from Jan. 1 to Feb. 15. The council had looked at pushing that date back to April 1 in order to give the two lodging establishments more time to prepare for collecting the tax, intended to help fund and promote city tourism efforts in the area. The Cook County Auditor’s Office has agreed to administer the tax, but the city is awaiting a signed agreement from them. Apparently, the AmericInn and the Mariner Motel haven’t received word from the city to start collecting tax.

“The lodging tax is passed and was set to go for the first of the year,” said Mayor Scott Johnson. “We weren’t ready.”

George Pope of the Silver Bay Tourism Association told the council that the whole process “...isn’t rocket science. It’s a marked benefit for Silver Bay and the area. There is no downside.”

Pope explained that lodge owners from outside the city are on the tourism board and the group was waiting for Silver Bay to get started so they could approach other establishments for support and approach local governments for similar resolutions supporting a lodging tax, hoping to widen the scope of the collection area.

He told the council that the whole process isn’t that complicated and a phone call to the lodges would be a simple step to inform them to start collecting the tax.

“This is a pass-through tax that doesn’t affect their bottom line,” said Pope.

Council member Dave Gustafson called it a “good, good project” and proposed the Feb. 15 date to start collecting the tax. It passed by a 3-1 vote.

• City attorney Wayne Johnson informed the council that he again sent notice to MnDOT that the city was not responsible for water line relocation costs for the Highway 61 reconstruction project in 2006 near the intersection of Outer Drive. According to the city, the state failed to include the relocation of the water line in the bids and the ensuing cost overrun to relocate the line were not the city’s responsibility. MnDOT is insisting that the city owes approximately $43,000 for relocating the line.

“The City of Silver Bay is not responsible for any part of the water relocation costs,” Johnson wrote.

Tags: silverbay, liquorstore, silverbaycitycouncil