Madison City Council on Tuesday held the second reading of an ordinance to approve the use of local income tax revenue bonds to cover about $2 million in cost increases of an $8 million project to rebuild the city’s iconic Crystal Beach pool.

Renovating and rehabilitating the depression-era landmark, built in 1938 by the Works Progress Administration, was originally expected to cost about $2.5 million when the project was bid in April 2021. However, once work got underway the project grew much larger in scale after widespread decay to the pool deck, pumps and pipes forced the city to rethink the renovation and opt to demolish the pool and plan for a total replacement.

Knowing that the original pool had served the city for more than 80 years, the city opted to move forward with a new pool featuring more efficient operation and more modern amenities and features while maintaining the original clamshell design to preserve the park historically. The cost of that project was originally estimated at $6 million but when the only bid received was opened the price tag was set at $8,030,000.

According to Madison Mayor Bob Courtney, the city had pulled together funding and bonds to cover the anticipated $6 million cost but funding would be needed from additional sources to cover the additional $2 million and the city cannot move to accept that bid until it can prove that it has enough funding in place to cover the project.

In recent discussions, and at Tuesday’s council meeting, Courtney said the city is still pursuing investment partners to help pay for the project — a cash donation or pledge toward the debt service and even possibly grant opportunities — but that the best option to secure the funding now and move forward with the project is for the council to approve a Crystal Beach Economic Development LIT Revenue Bonds ordinance.

“This is a way we can service that debt with new revenue created without new taxes,” Courtney said, adding the plan is to use about $150,000 annually from the city’s local income tax to buy revenue bonds to cover the $2 million cost while also looking at ways to reduce costs of the project without compromising the usefulness and longevity of the pool moving forward.

Councilman Dan Dattilo asked if there was any way to scale down the scope of the project to stay within the $6 million budget by eliminating some of the proposed features of the new pool — perhaps eliminating the lazy river and splash pad while preserving the iconic shape of the pool.

“The answer is no,” said Tony Steinhardt, the city’s economic development director. “It’s all about what’s underground. The electronics and pumps.”

He noted the features Dattilo mentioned might save $500,000 to $1 million of the overall cost but at the expense of making the pool more usable now and for decades to come.

Courtney agreed, adding that the features designed into the pool will make it appeal and be useful to more age groups and make it a more desirable destination for swimmers from a wider area which will increase use and revenue to support the pool and pay off the debt.

The $8,030,000 bid the city received from RLTurner Corporation came with a 30-day deadline and due to the volatile nature of the construction and supply industries as well as the bond and finance market, moving sooner rather than later could actually save the city money. If the project were to be scaled down over the next few weeks, approved by the various board and councils and then rebid, the city could end up paying just as much for a lesser pool due to additional design costs and since costs for construction, equipment and interests rates are climbing higher all the time.

In addition, the replacement would be drawn out even longer after the project has already cost the entire 2022 swim season and construction of the new pool is expected to take most of the 2023 summer.

“Not moving forward would create significant uncertainty regarding costs and interest rates as well as timing,” Courtney said.

“While nobody is happy about the construction environment that we have found ourselves in since COVID, we have to manage the risks as we know them and measure the opportunity costs of inaction,” Courtney said. “We are certain that we can pursue a plan which delivers a pool the community wants, eliminate the downside risk of uncertainty, and do this without increasing property taxes.”

Steinhardt noted that rising concrete costs, labor shortages in certain trades and the inability to get delivery of equipment needed for the project make delaying a decision risky and potentially costly.

The ordinance will come up for a third reading and possible adoption at the council’s next meeting on Tuesday, Jan. 17, which will still leave enough time to comply with the 30-day deadline on the bid.

In other business, the council elected its President Pro Tempore for 2023. One nomination was made — Carla Krebs — and the vote was 5-1 with Councilman Curtis Chatham opposing and Councilman Jim Bartlett absent with an excuse.

The council also approved a resolution establishing minor changes to the guidelines for remote participation of city meetings.