MEXICO – Selectmen at a special meeting Monday afternoon renewed a contract with Generations Health and Fitness.

They also awarded the contract for engineering road work to A.E. Hodsdon of Waterville.

Town Manager John Madigan said Tuesday afternoon that the board voted unanimously to renew the Generations contract through June 30, 2008.

Rent will be based on 30 percent of the gym’s gross revenues, a figure he said is expected to be between $8,000 and $9,000 annually.

The gym is located in the Mexico Recreation Center.

Madigan said the space rented to the business is about half what it had been. Generations will use a space in the basement and one room on the first floor, leaving the town with the second floor to lease.

Hodsdon engineers are expected to begin engineering work for Swett Avenue and the Ledgeview area, and design work for Mexico Avenue within a couple of weeks. The Waterville firm bid a base price of $23,770 for the Swett Avenue project, and $4,128 for the Mexico Avenue project.

Those figures could rise, said Madigan, if water and sewer work are required.

Plans are to reconstruct Swett Avenue and the six adjacent short streets sometime next year, a project that has been estimated to cost at least $1.3 million. Madigan said he plans to apply for a federal Community Development Block Grant as well as seek financing through the Maine Bond Bank.

Construction is expected to begin next year.