In a sign of the times, contractors eager to renovate and expand a city hall and public safety building in the city of Inver Grove Heights have put in bids that dipped 22 percent lower than what city officials had expected.

The city had budgeted up to $20 million for the new structure, which would replace a 27-year-old building that no longer provides enough space for the Police Department and city offices, if the City Council approves the project.

The city received 10 bids for the proposed addition and renovation. The low bid was $11,690,900, which would make the entire project budget $16,668,332, compared with a pre-bid estimate of just under $20 million for the project total, said Jenelle Teppen, assistant city administrator.

City officials in Inver Grove Heights and in Burnsville have expressed hope that infrastructure and other major projects needed now could be built for less cost, given the economy and a building slump, if communities are able to move ahead with them.

The Inver Grove Heights City Council will hold a special work session with a financial consultant April 6 to discuss financing for the project. The council is to award the bid on April 27, if it approves the project.

One option, City Administrator Joe Lynch has said, would be to use up to $4 million in general reserves, which would lessen the burden on taxpayers.

Officials also said capital improvement bonds could be interest-free for the first two years and structured in such a manner that as the city's population grows, the cost would be spread out among more property owners, beginning in 2011.

The renovated facility, on Barbara Avenue just off 80th Street, would be doubled in size to 62,620 square feet and provide room for police vehicles, equipment and other public safety needs, as well as meet standards for being accessible to the handicapped, and for police department holding cells. It would also be more energy efficient and update a heating-and-cooling system that frequently breaks down, officials say.

The proposed project comes as the city grapples with budget cuts, due to state aid cuts and less revenue during the recession.

Joy Powell • 952-882-9017