The Albert Lea City Council on Monday ordered an engineering company to prepare plans to extend city sewer and water north of Edgewater Park.

When installed, the sewer and water will service the proposed multi-million dollar St. John’s Fountain Lake campus planned on a portion of the former Albert Lea Golf Club property, along with properties along Country Club Road and potentially north in the Stables area in the future.

How the estimated $2.3 million sewer and water extension will be paid for still has to be negotiated and appeared to be a point of disagreement Monday night.

The project includes constructing a sanitary sewer lift station, water main, sanitary sewer, storm sewer, and bituminous and gravel street construction, said City Manager Chad Adams. It also accommodates future extension of services to West Plaza Street.

Preliminary discussions about the project have called for the project to be paid for with assessments to property owners and city funds, which would most likely be tax increment financing. Under tax increment financing, a portion of the taxes St. John’s would pay over a specified time frame would go back toward paying off the city’s portion of the project.

Scot Spates, St. John’s administrator and CEO, said while the organization is open to paying an assessment to cover its property, he does not think the nursing home should be forced to also have to pay for the project with its taxes.

“St. John’s owns 52 acres or 20 percent of the 265 acres part of the extension,” Spates said. “The St. John’s project is one piece of a larger puzzle.”

He said the project has been five years in the making and the nonprofit organization now has funding for the entire project, noting it is ready to go out for bids this week.

He hopes construction will begin this fall.

Spates said the facility will provide a better level of care to seniors in Albert Lea and Freeborn County and will create 30 new jobs within 12 to 18 months of the completion, with the possibility for 30 more. Jobs would include new certified nursing assistants plus management positions such as a director of nursing and housing director for the campus.

As of Monday, he said there were 69 people on the waiting list for the project, four of who are not from Albert Lea or even Minnesota.

A resident on West Edgewater Drive said he just installed a new well and septic system and was disappointed he was not notified earlier that the negotiations with St. John’s were taking place.

Albert Lea Mayor Vern Rasmussen and others on the council emphasized they were supportive of the St. John’s project. Rasmussen noted, however, that without using tax increment financing, the city portion might have to be paid by taxing all city residents.

In other action, the council:

• Authorized the sale of $2.05 million in permanent improvement revolving fund bonds.

The bonds cover the neighborhood improvement project for 2014, the state-aid overlay project in 2015, the alley project between First and Second avenues and a portion of equipment needs in 2014.

The bonds will have a term of 10 years.

• Authorized the sale of $1.9 million in general obligation refunding bonds tied to the remainder of $3.7 million in bonds issued in 2005. The action is expected to reduce interest expenses by about $80,500 during the next seven years.

The bonds will have a term of seven years.

• Authorized Freeborn County to oversee dispatch services effective Dec. 28.

The agreement calls for phasing out the city’s portion of the personnel cost by 2018. Starting that year, 100 percent of the cost would be paid for by the county.

The city of Albert Lea presently pays two-thirds of the about $600,000 personnel costs.

Under the agreement, the city and county would each pay for half of the cost in 2015, and then in 2016, the county would pay two-thirds and the city would pay one-third. In 2017, the county would pay 75 percent and the city would pay 25 percent.

Across the state, counties are required by law to providing 911 dispatching services, and the state typically communicates with counties about dispatch centers when there are new mandates.

• Ordered the rebidding of improvements to the Fountain Street sanitary sewer lift station.

The project is being rebid after high bids were received in early June. It is being split into separate contracts out of an effort to attract more favorable bids.

Estimated costs are between $450,000 and $500,000.

• Approved a conditional use permit for the construction of semi-detached townhomes at the southwest corner of Keystone Drive and Crystal Drive. There would be eight new units.

The council also approved combining lots on the corner to allow for construction.

• Approved reconfiguring lots at 907 Ekko Ave. to accommodate construction of a future dental office.

• Accepted a 2013 Assistance to Firefighters Grant for about $145,000.

The grant will cover the purchase of high-pressure, self-contained breathing apparatuses for the entire department.

The award requires a cash match of about $7,600 that will come out of the annual budget.

• Approved removing two parking stalls on College Street west of the Freeborn County Courthouse to improve safety.

• Accepted donations Alliant Energy for $100 toward the Parks and Recreation summer youth programming.

• Appointed election judges for the Aug. 12 primary election.

• Approved an interim use permit to allow a gravel parking lot at 2340 Crossroads Boulevard.