City Council Set To Approve Main Street Funding

On the agenda for tonights city council is an item to approve the private sector funding for the Complete Streets project (Main Street). The grant - as you may recall - obligates the city to pay for 40% of the project. That funding is split into two parts. Half a city wide obligation and half from the private sector.

The 20% of what we were lead to believe would be the cost to the private sector ($1.57 million) could come from tax credits, donations, a special tax assessment district, or a combination of these funding sources. The special tax assessment district would be defined by buildings or businesses that could be shown to benefit from the project.

Let’s remember that these percentages were put together when the projects cost was expected to total $7.85 million. That would break out with the grant paying for 60% or $4.71 million and the city paying for 40% or $3.14 million.

The report to the city council from Matt Walsh dated July 25, 2013 has the added cost of $2.5 million for the burying of the South Main Street power lines. So now the city’s portion is $5.64 million or 55% of the projects estimated cost. The private sector cost still remains at $1.57 million according to Matt’s report. And the federal funding remains constant at $4.71 million

But wait there’s more to this story. As I wrote in my September 4, blog the cost of the project is $18,391,629, based on the one bid the city received and my best abilities to add. That means the private sector contribution has gone down from 20% to 8.5%. And the city’s contribution for the project has gone from 40% to 75%. Or from a $3.14 million payment to $13,681,629.

So here’s what will happen tonight. The city currently has a commitment of $560,000 to pay for the $1.57 million private sector funding. The administration proposes that the city council authorize the administration to purchase a general obligation bond for the remainder, $1,010,000 million. That puts you and me on the hook if more private sector funding can’t be found.

The administration now proposes three options:

1 - Payment from the general fund (you and me),

2 - Use the current 21 plus acre Sears Block Tax Increment Finance District (TIF). However, the TIF district won’t have enough money pay to for the private sector obligation for this project.

3 - A Special Assessment District. This option would obligate the businesses who are impacted by the Main Street project to pay based on a proportional formula either by frontage or their building’s tax assessment.

But we don’t know, the city administration doesn’t know and the city council doesn’t have a clue as to how much this project is going to cost. This after assurances from our city engineer that there was plenty of wiggle room in the budget. It now appears that the wiggling has turned into squirming.

Without the council approving a bond for the private sector funding, the city can not sign a construction contract. That’s assuming they can find a contractor who can come within a mile of the estimated costs as detailed by the consultants, our city engineer and as listed in the grant.

Remember the snow melt system. The one component of the project that almost everyone agreed would have the most significant (if not the only) positive economic impact for our downtown. Yeah that part of the project. Now the administration is considering using funds that would have been used to heat sidewalks (and hopefully the streets) to reduce the overall costs of the project, to try and get it close to budget. 

And one more bit of good news for our downtown landlords and merchants. While not a component for the construction funding, the administration is asking the city council to consider a Business Improvement District (BID). This would obligate the downtown folks to pay for the added costs of maintenance this project would bring. $283,000 the first year and it doesn’t get cheaper from there.