MARSHALL - While the Marshall-Lyon County Library board agreed Thursday to reduce the total cost of a proposed library to $5 million, that still leaves a $900,000 gap between what's been pledged or committed and what's needed.
"Financing will be one of the primary challenges," city administrator Ben Martig told the library board.
The council is expected to discuss the library project at a meeting Tuesday.
If the city is willing to help cover the $900,000 gap, it would need to specify a source for that money, Marshall Mayor Bob Byrnes said Friday.
Byrnes said the city would have two likely options - it could sell bonds and use the interest from the $2 million in proceeds from the sale of the city-owned hospital to pay off those bonds, or it could use a general referendum that must be approved by voters.
Byrnes said the council would not use the proceeds, or specifically the $2 million principal from the hospital sale, to fund the gap or any part of the library project.
"The interest (of the council) is to protect the principal, " Byrnes said.
Martig said at Thursday's library meeting the hospital proceeds or the interest from the proceeds could be used for the project, but councilwoman Jennie Hulsizer, the city's liaison to the library board, said the council as a whole was not willing to use principal of $2 million in revenue from the sale of the hospital for the project.
"The council was clear that was a sacred cow to a lot of them," Hulsizer said of the $2 million. Hulsizer suggested Martig not include that as an option for financing. She agreed the council may consider using the interest generated from that $2 million for a library project.
Library officials said Thursday a resolution to agree on a $5 million project instead of the original $5.5 million would help the council to make a decision.
The city and the library are facing an Oct. 15 deadline from donor Robert L. Carr, who, along with his wife, Phyllis, has pledged a $2 million donation contribution toward the project. Carr said this month in a letter to board and the council he will withdraw his offer if the city has not made progress in terms of construction specifications and a financing plan by Oct. 15.
But Carr's intent with the $2 million donation does not seem clear yet to city or library officials.
Martig said while he had believed Carr was interested in being the construction manager of the project, Carr just recently told him he wanted his company to be the general contractor in order for the city to receive the $2 million, Martig said.
"I thought that was a good option," Mark Goodenow, a Lyon County commissioner and liaison to the library board, said of allowing Carr to be the construction manager.
Martig said he's working with city attorney Dennis Simpson to learn if it would be legal for Carr to submit a bid in which the $2 million was a factor.
While Martig and Simpson consider that question and work continues on financing, library board members discussed what they could do in preparation for Tuesday's council meeting. Library board president Kathleen Ashe said "this board has to agree with that $5 million figure."
Board members said the $5 million still provides the necessary square footage on one level and allows for a second phase of the project.
Board member Al Kruse said he did worry about not getting what was needed or wanted in a library and instead getting only close to what was needed or wanted.
Goodenow said $5 million works and allows for the second phase, which would include a more public garden space.
Ron Halgerson, the project's architect, said the board must make sure this board and future boards know a second phase is part of the library's strategic plan.