At the Thursday night meeting, City Administrator Dale Neiman presented a report that expanded on a discussion about road repairs begun at the Sept. 27 meeting, during which disincorporation was a main topic.
Among the issues related to disincorporation brought to the council on Sept. 27 by Frank Brumfield and Bill Shields was asking the city to complete a study for a citywide improvement bond.
Brumfield asked for consideration of a $150 million bond to bring all street to standard specifications, which would include street paving, street lighting and storm drains.
Neiman explained that the city can’t issue bonds without providing security to guarantee that the bond payments will be made.
There are two ways to ensure that; one is revenue bonds, which dedicate a specific source of revenues that will be used to make the payments. Such bonds are generally used for construction of water and sewer facilities.
The other avenue, said Neiman, is a general obligation bond, in which liens are placed on the property of people who benefit from street improvements to guarantee the annual payments are made. General obligation bonds, he added, require two-thirds approval from voters.
From general obligation bonds, assessment districts are formed, he said. Those require more than 50 percent of the voters in the district to agree to the assessment. The city has attempted in the past to form 10 different assessment districts, nine of which failed, said Neiman.
Neiman said he believed the assessments weren’t supported in the past because many residents live on fixed incomes.
However, he suggested developing a program to complete assessment districts when the residents are willing.
A report Neiman presented to the council explained that the approach would include a revolving loan fund that could grow to $17 million over a 20-year period, Neiman said. Money could be loaned to the assessment districts for road repairs and would grow as payments and interest are made back into it.
“This approach has a much better chance of succeeding,” Neiman suggested.
That’s because it won’t affect people on fixed incomes, he said, who could be given deferred loans, with the money paid back when the property is sold.
These assessment districts would save the 5-percent cost of issuing bonds, and could save staff time as well, he said.
ROADS HAVE NO EASY FIX
“I’ll be the first to tell you we’re facing a significant challenge in finding ways to fix the streets,” said Neiman.
Neiman’s report said the city maintains 49 miles of dirt roads and 65 miles of paved roads. According to a 2005 study 50-percent of the city’s streets are in poor to very poor condition.
To just maintain the current street conditions – using sealing and pavement overlays – would require $400,000 annually, said Neiman. However, the city currently is only able to spend $100,000 of its gas tax money for road maintenance.
At that rate, said Neiman, the city’s paved streets eventually will return to gravel.
Neiman asked if the council wanted him to write a letter to local publications in order to help explain the process to the public, and idea the council embraced.
Council member Joyce Overton said some of the previous assessment districts didn’t pass because the money was slated to go into the general fund, and that people didn’t understand how the process worked.
“If they don’t understand they’re going to vote no on it,” said Overton.
Council member Roy Simons pointed out that even if they sold bonds for streets they would still need assessment districts because adjacent property owners are responsible for the improvements.
In 1991, he said, four assessment districts slated for the other side of the highway failed. “I think the major issue was trust.”
Simons said people didn’t trust that they could have deferrals from paying, and didn’t understand that infrastructure improvements wouldn’t raise taxes under the auspices of Proposition 13.
Council member Chuck Leonard disagreed with Overton’s statements about past failed sales tax measures, saying that the recent Measure L was to go to a specific fund and would be used for roads only.
“Anything we have ever done has not been promoted,” replied Overton.
Neiman suggested if the city were to consider pursuing another bond issue, that they should spend a year working on it, including putting the measure together and promoting what it would do with the public.
Council member Curt Giambruno said he has worked on five tax issues to help fix roads in the last 12 years, and agreed with the effort to educate the public.
Mayor Judy Thein agreed with Neiman’s suggestion of taking the message to the community. “We need to start an education campaign.”
She said the city would need the media’s help to spread the message. Thein also suggested using a demonstration project to explain how the assessment district would work and holding town hall meetings.
Educating city residents about the issues is where the city will have to start if it wants to succeed, said Thein.
During public comment, businessman Vince Metzger suggested the city find other ways to fix streets beside sales tax.
He said he already charges 7 and ¾ percent sales tax, he said. A new measure would likely take it to 8 percent. “To a businessman it becomes extortion.”
He suggested they consider doing away with the sales tax to support police if they wanted to add a new tax for roads.
Metzger said the city should tell property owners that in order to have curbs, gutters and sidewalks, it would cost all city property owners $8,000 per lot.
The City Council’s consensus was to have Neiman move forward with starting a public education campaign. Thein said the core issue is understanding, which can lead to motivation, action and trust.
E-mail Elizabeth Larson at
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