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FAIRMONT-- The Fairmont City Council held the first designated work session on Thursday to start talking in earnest about what to do with the Local Option Sales Tax (LOST) funds. During the work session the council considered a variety of items such as whether it wanted to spend the money on one large project or multiple projects, what kind of legacy the funds would leave for Fairmont and what kind of future operating and maintenance cost would be acceptable.
The LOST funds have been being collected since the ballot measure passed by voter majority in 2016. To date there is over $12 million available but just over $6 million cash on hand. The city's approved sales tax authority is $15 million.
The funds are currently undesignated as the vast majority were most recently intended to go toward a new YMCA- operated community center. However, in November of last year the Fairmont Area Community Center Foundation, which had been working on the project, announced that it was no longer pursuing a community center, leaving the city--and the funds-- in limbo.
On Thursday, Fairmont City Administrator, Jason Baker, made clear that the purpose of the work session was not to select a project, rank a project or make a funding decision, but to determine the type of community investment it believes best fulfills the intent of the sales tax.
Finance Director, Paul Hoye, confirmed the wording on the ballot measure that passed was for recreational amenities, trails and a community center.
He shared with the council the financing plan that was done by Taft, the city's bond counsel, in 2023, which council approved.
While the majority of the funds were set aside for a community center, some of the money has been spent, including $150,000 toward the Amber Lake boat landing, $767,000 on design for the community center and $144,725 on legal work from Taft. Just over $2 million of the funds were also used to pay for the ice mechanical equipment and design work for a new ice arena, which was expected to be phase two of the community center project.
"We're currently not spending anything right now. There are no more contracts or expenses right now," Hoye said.
He also shared that the city has earned $578,000 in interest as of March 31, 2026.
"Ultimately right now we have just over $12.3 million that we have available left of the sales tax funds.... And we have just over $6.2 million cash on hand," Hoye said.
Baker then laid out three viable options for council to consider. One was to use the funds on one transformational community investment (one large project). Another was to use the funds on a combination of medium and small investments (e.g. splash pad, pickleball courts, trail expansion) and the third was to use the funds for multiple community improvements ( e.g. shelters, lighting, parking improvements).
He also listed some questions for council to consider including what legacy the funds would use and how should recreation, quality of life, tourism and economic development be balanced.
Mayor Lee Baarts jumped in first and said, "I like the idea of, if you look at option C, you get more bang for your buck. If you're looking to please more people, you get more projects done."
Council Member Randy Lubenow, who has long been a supporter of both a community center and ice arena, asked the council to consider what the intent of the LOST funds were.
He ticked off a number of people who started Project 1590 many years ago and said that at the time the LOST funds were voted on, it was very clear that it was Project 1590 moving forward with a community center project and the hockey association being included in a phase two project.
"When it got to the city council, the lawyers got involved and then the wording was changed from what was originally presented to the city council," Lubenow said.
He did say that some of the money, however, could be used on the lakes, which he said was a need, rather than a want
Finally, Lubenow said that when talking about leaving a legacy, he was in favor of option A-- one big project.
"That's the kind of legacy I want to see, where people, elderly all the way down to newborns, can use this facility," Lubenow said.
Council Member Jay Maynard then agreed that it was pretty well-understood that the LOST sales tax vote was about a community center, but that the time from then to where they were at now was all water under the bridge.
"What I do think we have here is an opportunity that we're not going to get again, frankly.... we're not going to be in a position to spend $12 million again," Maynard said.
He said he thought it was best for the council to use the money on something that it couldn't do without the LOST funds and that also represents the council's chance to make a big impact on the community.
Council Member Britney Kawecki agreed that the project should be big and impactful. Regarding options B and C, she felt that the funds would get lost in the midst of multiple projects.
"I agree that overwhelmingly the support has been for a community center and that's where we make our biggest statement," Kawecki said.
She said it would be worth then looking at a FEMA dome, as Lubenow had earlier said. She also said she thought some of the money should be put toward the lakes by doing a lake improvement plan.
"I agree with all three of them as far as the legacy," said Council Member James Kotewa.
He said the biggest concern he's heard from people are the recurring costs from a large project, such as operating costs. Kotewa said he was not against a community center or hockey project as he understood it would add value to the community and provide something to do during the winter time. He also agreed that it would be worth investing in the lakes.
Council Member Wayne Hasek said that where the lake conditions are concerned, a lot of it is out of the hands of the city and he thought it came down to farming practices.
Later in the meeting, several council members pointed out that farming practices can't wholly be blamed as residents' grass clipping and fertilizer are also making their way into the lakes.
Hasek, a long time opponent of a community center, said that much of the county's population is over 65 and that he didn't forsee them using a hockey arena. He leaned toward using the funds on multiple, smaller projects.
As there was some talk about involving the Fairmont Area School District in a project, Kawecki said she wanted to be sure that any project they do is for a community building.
"Being a sports parent, I think it's not hidden, there's not enough court time," Kawecki said.
She expressed wariness of having a community center that was taken up with school sports and not available for the community to use.
Maynard agreed with her and said, "If it's soaked up by school sports practicing, training, and the average citizen can't get a court time... then we've done the taxpayers a massive disservice."
After a half hour of discussion, Baker said he thought it sounded like the general consensus was that the council was leaning toward option A, one transformational community investment.
Some time then was spent talking about what level of future operating and maintenance costs is acceptable.
Kotewa asked Hoye what the average cost of an added staff member with benefits would be and Hoye said it varies based on the position but that the minimum would likely be in the $80,000 to $90,000 range but that it would be higher if it was a director-level position.
Lubenow pointed out that as the Southern Minnesota Educational Campus (SMEC) building is for sale, it would save the city $100,000 annually once sold.
In talking about other cost-saving efforts, he questioned whether all of the parks are being used and suggested some could be turned into natural grass lands that don't need to be mowed frequently.
"A lot of them are by lakes. That would also help our lakes," Lubenow pointed out.
Going back to Kotewa's question about staff, Kawecki said she thought it would be more worth looking at what other cuts in other departments could be made.
"Something isn't working. I think that's the question. What level of future operating and maintenance cost is acceptable? I think we just have to figure out how we need to make it work," Kawecki said.
Toward the end of the discussion, council members agreed that whatever they pursue, they should be looking at grant opportunities to help fund the project(s).
"We need to hire someone, or designate someone to look for those opportunities," Kotewa said.
When asked for final thoughts, Lubenow questioned what time staff has to work on the project.
"I think we need to be able to pitch to shareholders the idea of a community center building and see what the outcome is. Pitch a hockey arena and see what the outcome is and also the FEMA dome. Those are all three pretty good options to pitch and see who wants to come along for those projects and see what's feasible," Lubenow said.
Kawecki also said she wanted to know who was going to work on the project and what the priority would be as she pointed out it's already been in the works since at least 2016.
"We've already wasted almost $1.2 million of the sales tax money that went out the window," Kawecki said. "How long is this it going to take before the ideas come back to the council... how long is this going to drag out?" she asked and stressed that it be a priority.
"I want this to be a priority. I think the citizens are tired of it. They lost confidence in it... and I don't want that to happen again," Kawecki said.
Baker said that staff would summarize the council discussion and identify additional information that's needed from council before the next workshop.
"Staff will be working on this," he said. "This is great because staff hasn't had clear direction for some time is my understanding. This is a good first step for us to be able to move this project forward."