JOHN DAY — The city of John Day will likely lose the $2 million in lottery grant funding that would go toward the construction of a new community pool if the $4 million bond on the Nov. 8 ballot doesn’t pass.

Interim John Day City Manager Corum Ketchum provided an update on the grant’s status during a meeting of the John Day City Council on Tuesday, Oct. 25. The update had been requested by members of the council.

The city received a $2 million state lottery grant to go toward the cost of building a pool, but that money came with an expiration date. If the city does not sign the final grant agreement by Jan. 15, 2023, the funds will be withdrawn, Ketchum said.

The bond failed once already after voters deadlocked in an 802-802 tie in the May election. If the measure fails again this time, Ketchum said, the city may have to return the money.

“We need to have a project selected that we can viably spend money on,” Ketchum said in an interview after the meeting. “In this case, it’s the pool project that we have been working on for the last five years.”

Ketchum added that if the bond passes, the city and the John Day/Canyon City Parks and Recreation District will be able to use some of the grant money to pay back expenses that have already been incurred for preliminary design work on the pool project.

Ketchum also cleared up confusion about an additional $1 million in funding that has been characterized as a recent loan to cover cost overruns, stating that it is part of the same financing package that was previously approved for the project.

“Back in February of this year, council approved $3 million in interim financing, with $2 million that would be the lottery money and an additional $1 million to be the last dollars spent on the project,” Ketchum said.

Ketchum added that the $1 million line of credit was taken out in hopes that the money would not be needed to construct the pool but would be available in case of overruns.

“I think it was wise of council at the time to say, ‘Well, construction costs might be going up,’ Ketchum said. “February of 2022 was just at the start of this inflationary cycle.”

“Having that extra $1 million of cushion on a $5 million-$7 million project is not a bad idea. The hope is that we never have to touch it,” Ketchum said.

Also potentially lost if the bond fails would be right around $320,000 that the city has spent in developing design plans for the project.

John Day City Councilor Shannon Adair said during the Oct. 25 council meeting that the designers working on the pool plans can’t be expected to work for free and that spending money on those plans was a step that had to be taken to secure any type of funding for the pool project.

The current plan is to use up to 20% of the $2 million in lottery funds to pay for the cost of developing the pool plans. So far the city has spent $320,000 to cover the cost of developing those plans and will have to take that money out of its own budget if the lottery grant has to be returned.

Ketchum explained that the city could apply for another $2 million in lottery funding if the bond doesn’t pass, but the process would be a much tougher one the second time around.

“It would be more difficult to get back on the list … especially if we demonstrate that it is not a sure thing that we’d be able to spend the money,” Ketchum said.

Ketchum said he was “fairly confident” that the current vote is the last chance the community will have to obtain a pool for the foreseeable future in the event the pool bond fails.

“We worked really, really hard on this process,” he said. “It’s been a five-year process to get to this point. I don’t think anyone has the appetite right now to turn around and restart a five-year process on a different kind of facility.”

There were hopes among some that the $2 million in lottery funding could be used to build a cheaper alternative to the estimated $7.1 million proposal presented to voters within the John Day/Canyon City Parks and Recreation District. If the bond fails, however, it’s not clear whether a formal proposal could be prepared in time to secure the lottery funds before the grant expires.

As Ketchum wrote in his staff report to the council, the city and the parks and rec district have until Jan. 15 to select a project in order to be eligible for the $2 million in lottery funding.