Former city councilman Jay Jordan expresses his concerns about the city’s plans to borrow $5 million for upgrades to the city’s infrastructure. Jordan said he wanted to know more specifics about what the city planned to do with the money. Photo by: Luisa Porter/Dispatch Staff
April 11, 2014 10:32:34 AM
During a public hearing Thursday on a proposed millage increase for capital improvements in Columbus, more residents expressed concern over the lack of a defined plan and the approval of a long-term loan for short-term fixes than the tax increase that would be needed to fund them.
City leaders are mulling a 1.1-mill increase to finance a $5 million bond issue over 20 years that would pay for infrastructural upgrades, including road and sidewalk repairs, installation of new sidewalks and drainage improvements. If executed, the city would be on the hook for a combined yearly principal and interest payment of between $172,000 in the near future and $490,000 toward the end of the debt financing period in 2034. The estimated extra cost to a taxpayer with a property valued at $100,000 would be $11 a year. The millage rate would be 41.23 instead of its current 40.13 rate.
Approximately 50 city residents and stakeholders filled the municipal complex courtroom Thursday seeking more information on how the council planned to spend the $5 million.
Mayor Robert Smith and councilmen first discussed the proposed increase during a March 31 special meeting. It was then that Steve Edds of the Baker Donelson Law Firm in Jackson briefed the council on its financing options for capital improvements and advised that now would be the best time to borrow money because of the city's recently improved bond rating and low interest rates. On Thursday, Edds said the rate for this loan may be slightly higher than 2 percent and the city could have the money in the bank by August if it chose to issue the bonds this summer.
During the March 31 meeting, Kevin Stafford, city engineering consultant, said there was more than $1.5 million in work left over from the city's last capital project cycle that ended in 2012. That cycle consisted of improvement suggestions from two lists: one set by councilmen based on feedback from constituents and another of engineer-recommended projects. On Thursday, Stafford said his firm's fee for managing the upcoming projects if the council approved the millage increase would be about 4.85 percent, the same rate as the previous improvement cycle. During that cycle, funding was split evenly among councilmen for the six wards and they worked with Stafford to complete as much work as possible in their wards before running out of money.
Ward 5 resident and former councilman Jay Jordan took city leaders, Smith in particular, to task over the lack of specifics in the proposed plan and the issuance of a 20-year loan to fix improvements that hold up for less than that amount of time. He also questioned splitting funding evenly across all six wards when some have more roads and drainage issues that need immediate attention than others.
"I'm not against a loan for the needs of the city to be met," Jordan said. "My concern is that we are facing long-term debt on a 20-year issuance of a bond for basically short-term items."
Jordan said streets have a short lifespan.
"We're talking about a 20-year debt for a seven-year street," he said. "I don't finance my car for 20 years and the life of your car may be six or seven years."
Jordan then referenced the lack of a list of roads being considered for improvement with the $5 million other than what was left over from the last cycle.
"There's no plan in place," he said. "We don't know what the $5 million is going to be used for. I think that needs to be understood."
Smith, however, said city leaders have stated "over and over again" what the money would be used for -- milling, paving streets, striping, curbs and gutters, sidewalks and storm drainage.
"I don't think you can be more specific than that," the mayor said.
"I think you can, Mayor," Jordan responded. "If you said Sixth Street and you said Seventh Street, and you said we're going to do drainage here and we're going to do this paving here. I know when I go to borrow money, I generally have a plan in place. I have to show my banker what I'm borrowing the money for. You've got to have a plan, Mayor. You can't borrow money if you don't have a plan."
Jordan's response drew applause from several in attendance. Residents were disgruntled, including one who said, "That's pitiful," when no city leaders could specify whether the city's project managing firm, J5 Broaddus, would receive its typical 6 percent service fee for its involvement, which includes meeting with councilmen to compile a list of 20 critical projects in their wards.
J5 Broaddus senior project manager Robyn Eastman told The Dispatch Wednesday that he hopes to have each of those lists ready by the end of May.
Other residents, including Joe Boggess of Ward 5, echoed Jordan's concerns that more details were needed for residents to have an informed opinion on the proposed tax increase.
"It's just an instinct I have that if you're borrowing money for 20 years for routine maintenance and minor improvements that you'll be wanting to borrow more money (in less than 20 years)," Boggess said. "We would feel more comfortable either saying we're for or against the proposal if we knew as specifically as possible what the city plans to do with the money."
Ward 4 resident Sherrell Sturdivant also wanted to know what streets would be paved. When her councilman, Marty Turner, notified her about the possibility of homestead exemption, which entitles those who are at least 65 years old or those with disabilities to a reduced property tax, Sturdivant said she was concerned with paying her taxes in the short term.
"I'm not worried about in a little while getting on homestead in three or four years," Sturdivant said. "I'm worried about what's going on right now because I'm not on homestead right now."
More enforcement needed
Columbus police officer Greg Harstad said safety and prevention were key in making improvements last as long as possible, including the enforcement of vehicle weight limits on city roads. He also stressed communication with utility providers while doing the upgrades to ensure they don't need to do work of their own first.
"Nothing frustrates me more than driving on a freshly paved road and seeing somebody digging it up to put a pipeline or a power line in," Harstad said. "Get with the utilities and find out what is going to be paved and when it's going to be paved. If you have to replace a sewer line, do it then. I drive Bluecutt (Road) every day when I take my granddaughter to school. That road was just recently paved and I'm already seeing potholes and stress fractures."
Looking to the future
Ward 1 resident and local developer Chris Chain said he didn't mind a tax increase but stressed being more proactive about infrastructural upkeep. He said the city should also have money in its general fund each year for paving and repairs and not have to issue bonds every few years to finance them.
"I just don't think there's enough planning going on. Somebody ought to know where all the potholes are in Columbus," Chain said. "I don't think I've ever seen my councilman out in front of my street at any point in front of my residence."
Chain also expressed concern about the stagnancy in the city's tax base.
"You've got a lot of people that are moving to the outskirts and your tax base is going down from what you can put into your budget," he said. "I want to see our city grow, and it doesn't look like our city is growing too much. If our city grew, then our tax base would grow, and maybe our taxes would go down."
Nathan Gregory covers city and county government for The Dispatch.
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