|Trinity Standard - Local News
Stories Added - June 2009
Copyright 2008 - Polk County Publishing Company
City eyes loan, tax hike to improve streets
Trinity Standard - June 2009
TRINITY – Public comments on a proposal to borrow $500,000 and to increase property taxes to repay the money will be sought during a special Trinity City Council meeting on Thursday, June 25.
The meeting will get underway at 6 p.m. in the council chambers of Trinity City Hall.
At issue is a plan to borrow the money to make major road improvements throughout the city, according to City Manager Phil Patchett.
“We’ve been trying to do road work spending $50,000 to $75,000 a year and its just not working out,” he explained.
By putting together a larger work package, they hope to attract more bidders and “get more bang for the buck” in road improvements.
Patchett noted the small projects seemed to attract very limited interest – usually only one or perhaps two road contractors interested in the jobs.
The city manager noted that while all the details have not been worked out, he estimates that the repayment of a $500,000 loan over a 10-year period would require about an 11-cent increase in the local property tax rate.
This would mean that next year the current rate of 60.86 cents per $100 in assessed value could climb to around 72 cents.
That would mean that a property owners with $30,000 in taxable value would pay about $33 more per year.
During last week’s meeting of the Trinity City Council, councilman agreed it is time to move forward on road improvements and noted that while they are looking at a 10-year repayment on the loan, the city’s tax rate would start coming down in a few years as existing debts are retired.
A large set of time warrants issued in 2004 – also for road improvements -- will be paid off in 2012.
The council is currently considering issuing either time warrants or certificates of obligation (CO) to obtain the $500,000 for the work.
Both would be repaid using tax income but Patchett said the council is currently leaning toward time warrants.
“We could probably get a better interest rate with the COs, but we’d have to pay $35,000 to $40,000 to have them written and have an attorney look them over and issue them,” he said,
Time warrants are basically and straight loan and while most banks no longer will issue them, Patchett said a local bank has agreed to work with the city.
“If we issued COs, about $40,000 would have to come off the top to pay to have them issued as opposed to having to pay a slightly higher interest rate on the time warrants. Basically, it’s a wash and time warrant can be issued a lot quicker than COs,” he said.
Time is now important because the city council would like to have the roadwork completed before November when the weather is expected to bring a halt to road construction work.
Patchett noted that the roads that will be targeted for repair have not yet been selected and the council has tasked him to make recommendations.
“I’ll be looking at the amount of traffic and the condition of the exiting road in coming up with the recommendations,” he noted.
Also to be determined is the type of work that will be done but Patchett said it would either be an overlay or a less expensive chip and seal process.
He noted that most recently, the city used the overlay process on Railroad Street from its Madison Street intersection to the Brookshire Brother’s parking lot. Cost of that work was almost $100,000.
That project was given priority last year because, other than the state highways, Railroad is considered to be the most heavily traveled street in Trinity.
Patchett noted that the chip and seal process costs less than half as much as the overlay per mile and noted that, depending on the results of his study, the city would probably do a combination of the two.
During last week’s council meeting, Councilman Wayne Huffman suggested holding the special meeting to receive public input on the plan, even though such a meeting is not required under state law.
“We want everyone to have a say on this. We’re not trying to do anything behind anyone’s back,” he noted.
Huffman, who has been pushing to additional street repairs over the last several years, said he felt the work was needed.
“I am ready to get off high center,” he told the council.
Councilman Neal Smith, who is known for being fiscally conservative, agreed it was time.
“As bad as I hate to raise taxes, I feel we’ll have to do it,” he said. “In about three years, we’ll pay off some other time warrants and the rate will come back down.”
Smith also suggested that the city began setting aside money – particularly unexpected income – into a special road improvement fund so that the streets can receive better maintenance in the future.
Also voicing his support for the roadwork was Councilman Clegg DeWalt, who said the people of Trinity deserve better streets.