The Albert Lea City Council is slated to vote Monday on an agreement to pay for the city sewer and water amenities to the proposed St. John’s Lutheran Community on Fountain Lake.

Bids for the project came in at $1.58 million this week, said Albert Lea City Manager Chad Adams. Adding that in with engineering costs and contingencies, the sewer and water extension is expected to cost $1.9 million, he said. That also includes oversizing the system to allow for future development.

Adams said the present proposal gives St. John’s 20 years to pay back the $1.9 million assessment. Of that amount, $1.2 million goes to get the services solely to St. John’s.

The second part of the proposal would authorize tax-increment financing for up to 26 years. Under tax-increment finance, tax increment that is collected would be returned back to St. John’s instead of going back into the community. That could in turn be used to pay for the assessment.

St. John’s Administrator Scot Spates in November said the total cost of the development is estimated at $38 million, including land costs, architect fees, furnishings, equipment, construction and other fees.

Plans include not only a new nursing home but also an assisted-living complex and an independent-living complex, all joined by a town center, which offers services including an activity room and chapel, a barber and beauty shop, a coffee shop, a technology center and a fitness center, to name a few. There will also be owner-occupied duplexes. The campus will overlook Edgewater Bay.

St. John’s purchased the property, known by many Albert Leans as “the back nine,” in December 2010 from American Bank of St. Paul for $7,200 per acre. The land had been in the hands of the bank after it was surrendered by commercial developer Scott LaFavre following the property’s foreclosure.

Adams said while St. John’s has been a good community partner and advocate over the years, and its new project will meet a need for senior housing, the question remains how much the taxpayers want to support it.

Adams estimated it could be the largest public subsidy in the history of the city.

He said the city has made other concessions to assist the development, including reducing the interest rate on the assessment and bond.

On the other hand, part of St. John’s assessment would include oversizing the system to allow for future development.