A main topic at the November 13 Rushford City Council meeting was possible positive traction forward with the construction of the new Rushford Municipal Airport Hangar. The new hangar, a replacement for a six-unit hangar lost to fire in 2019, was scheduled to be completed last month. At the previous meeting, the Rushford Council learned that engineer Mead & Hunt would pressure contractor Olympic Builders of Holmen, Wis., about the project.
The contract provided a post-bid addendum for additional costs, and the council approved an extension of the project completion date from July 31, 2023, to October 1, 2023, earlier this year. The city has made two pay requests to the company for the $1.3 million project despite no activity occurring at the site as of last month.
While the contract has liquidated damages and clauses that give the city leverage, Engineer Matt Wagner of Mead & Hunt discussed the repercussions of doing so, at this council meeting, suggesting alternative strategies. Wagner also noted he’d been in communication with the company owner. According to him, the city isn’t in a position to tell the company not to do the project if they’re willing to, and they’ve agreed to pay for additional costs related to cold-weather construction.
The council was skeptical, however. Some asked whether the city should apply liquidated damages, of which a $500 per day penalty is allowed per the contract. Others suggested giving them a new schedule.
Wagner noted that applying penalties would be more feasible if an actual building was unfinished. With nothing on the site, he suggested the city pursue penalties through loss of revenue instead. Upon proposed completion last month, the city had individuals ready to rent three of the five units. With no hangars to rent, there is no revenue stream from them. The loss of income is a legitimate penalty because it’s easily quantifiable.
“I don’t like leveraging penalties. When dealing with contractors, it does get adversarial,” said Wagner.
“It’s hard to impose liquidated damages because they have a lot of avenues to say this and this and this,” said Councilor Jim O’Donnell.
Councilor Leigh Volkman suggested there are plenty of problems that could be contributing to the delay. “You could make all the effort in the world, but there’s plenty of problems that exist,” he noted.
“It’s a smaller company. I do think he cares,” added Wagner. “I just think there were issues.”
“He already violated it. That’s a scary proposition having a $500 per day penalty hanging over his head,” said O’Donnell.
“He’s saying he’s going to mobilize Wednesday and move forward with excavation next week. That is the plan,” stated Wagner.
The hangar building is being constructed in Indiana and will be delivered to the site. The contractor also subcontracted the electrical and hauling. The contractor expects the project to take six weeks to complete after the arrival of the building. With winter looming and construction difficult during that time, the council must reassess the project timeline once the building is in place. Some items may not be able to be done in cold weather. Unfortunately, frost and road bans in the spring could hamper things further if the project is still underway at that time.
Without nine rented hangar units, the city risks losing its National Plan of Integrated Airport status with the Federal Aviation Administration (FAA) and no longer having access to federal funding from the agency each year. If degraded to an “unclassified” airport, the city also risks facing competition from other airports for projects and being at the whim of the agency for any project approvals. The city did receive a one-time FAA hardship waiver, allowing the airport to continue receiving funding until 2025.
The delay won’t affect the project’s funding, according to City Clerk Kathy Zacher. Wagner agreed, noting a four-year shelf life on it.
In other news, the city received a report following an inspection of the buildings at the former Farmers Win Cooperative site by Jay Kruger of Construction Management Services, Rochester, Minn. The reports indicated the buildings are “substantially substandard.” The report doesn’t come as a surprise to the city but rather was part of the process of the formation of a possible Tax Increment Financing District for the redevelopment of the site.
The reports went through each one of the buildings and provided an estimated cost to get them up to standards. Whether the city takes them down or a developer refurbishes or demolishes them, this process identifies and proves the specific pieces, guidelines, and costs.
The city still needs to be in ownership of the property. According to Zacher, the city gave itself 90 days to conduct the necessary inspections. Without any unforeseen issues, the city should finalize the sale by the end of the year. The next step is determining property lines, utilities, easements, and right-of-way. The city will also focus on a community planning process to determine what happens with the site.
City Engineer Derek Olinger of Bolton & Menk expects to attend the next council meeting to discuss a road grant. The city’s next area of focus for road improvements is Elm Street, between Highway 30 and Highway 16. Engineers estimated the project cost at $1.5 million, and a Minnesota Department of Transportation grant could help with a significant portion. The city isn’t large enough to qualify for the typical street aid, so it’ll need to put forth a strong case for grant funding, which isn’t guaranteed.
There are many reasons why the city will hopefully find the support, including substandard utility services, possible future development at the Farmers Win site, more stormwater from the recently reconstructed State Highway 30, tourism in the area with the Historic Depot and the Root River State Trail, plus the city’s public safety – fire, ambulance, and police – all headquartered on Elm Street.
The next regularly scheduled council meeting is Monday, November 27, at 6:30 p.m. at city hall. The public is encouraged to attend.