Bids for airport fuel tanks come in higher than expected

Marshall City Council votes to award $1.8 million bid

MARSHALL -- Construction bids to replace the aviation fuel tanks at Marshall's airport came in higher than expected, Marshall city staff said this week. The low bid for the project came in at about $1.8 million, compared to a $1.3 million estimate.

However, Marshall City Council members opted to go ahead with accepting the bid, and to ask the Minnesota Department of Transportation for additional grant funds to help pay for the fuel tank project. Marshall Public Works Director Jason Anderson said the city had been selected for one-time state grant funds for the fuel tank project. If the city rejected the bids now, there would be no guarantees they could get different grant funding later, he said.

Anderson said the Marshall airport currently has two underground tanks for aviation fuel, including a 15,000-gallon tank installed in 1985, and a 12,000-gallon tank installed in 1996.

"Those tanks are beyond their useful life, and MnDOT announced last July a grant program to replace these types of systems," Anderson said. "It's a pretty rare funding opportunity."

In July 2025, Marshall received notification from MnDOT that the city was selected to receive a grant offer to replace the underground tanks with two above-ground tanks. In January, the city council authorized execution of a grant agreement for the project, with a 60-40 cost split between the state and the city.

"The project estimate was around $1.3 million, and unfortunately bids did come in a little higher than expected," he said. The low bid, from Minnesota Petroleum Service, came in at a little over $1.8 million, Anderson said.

Anderson said that, instead of rejecting the bids, city staff were asking the council for authorization to go back to MnDOT and request a larger grant to cover 60% of the new, higher project costs.

"This is a one-time grant program for fuel systems. If we were to just walk away from this opportunity and try to get a general aviation grant in the future, it likely would not score very well," he said.

Anderson said that by using excess funds from the purchase of an airport snowblower that came in below budget, as well as funding for a different project that did not receive grant support, the city can also meet a higher local share cost for the new fuel tanks.

"The Airport Commission met a week ago, and spent an extensive amount of time at the meeting discussing this and looking at what the other options might be - and there really aren't any good ones," council member Craig Schafer said. "The current fuel farm has really passed its expected life in their underground tanks, so it's probably not a good thing to really go too much past.” The commission supported moving forward and asking MnDOT for a larger grant.

Council members voted to accept the bid from Minnesota Petroleum Service, and request a state grant for 60% of the new costs.