Tonganoxie City Council tables bond sale authorization
With concerns about the consequences on the budget in a recession year, the Tonganoxie City Council agreed Monday to table a $1.24 million bond sale that would finance a package of improvements, including the long-delayed Fourth Street project.
The bond package included big projects included in the 2010 budget approved last summer. Those budgeted projects included:
• The $760,000 phase III of the Fourth Street improvement project.
• The $270,000 Pleasant Street Bridge replacement.
• The $210,000 fire station expansion.
To those budget items, City Administrator Mike Yanez asked that $210,000 be added for street repairs necessitated by the harsh winter. The $80,000 the council approved for routine street maintenance in the 2010 budget would fall far short of what was needed, he said.
The money would be used to repair Delaware Drive one block south of Washington Street and repair sections of Pleasant Drive and Ridge Street. Another $37,000 would be used to repair or replace downtown Fourth Street crosswalks, while $30,000 would be used to patch potholes citywide.
Tom Kaleko, city financial adviser with Springsted Inc., said bonding the budgeted projects and the emergency street repairs would increase the city's bond and indebtedness mill levy to 13.2 mills in 2011 from its 11.21 mills in 2010.
Council members, however, expressed alarm the added mill levy burden and at taking on the added debt during the recession.
"I have a real problem borrowing another $200,000 on top of this," said Councilman Tom Putthoff. "We have been spending money since we passed the 2010 budget. I feel like we need to postpone Fourth Street. We just don't need this street at this time with the financial shape we're in."
Other council members were also ready to delay the project.
"I think the landscape has changed since we discussed this in the budget process," said Councilman Jason Ward, who presided over the meeting in the absence of Mayor Michael Vestal. "Fourth Street has taken a long time. If we can prevent further damage to the mill levy, we should try."
Ward, however, was among council members expressing support for the fire station expansion, saying it would help the city retain firefighters.
Complicating any delay of the Fourth Street improvements was the council's action in December to award a construction contract for the project to Meadows Construction.
After a quick read of that contract, City Attorney Mike Kelly said it appeared the city would have to repay Meadows Construction or take possession of any materials the firm already ordered for the project.
When Kelly said he couldn't give the council a clearer picture without a more detailed review of the contract and suggested the city contact the firm to find out if it had ordered any construction materials, council members agreed to table the bond sale authorization until its next meeting.
Some kind of bond measure will be needed because of the need to go forward with the Pleasant Street Bridge replacement, which will be completed with funding from the Kansas Department of Transportation, Yanez said.
In his agenda comments to the council, Yanez again spoke of the need to address Delaware Street one block south of the Washington Street intersection. A developer constructed the street with a thin layer of base rock and concrete before the city adopted its current design standards, he said.
The street has been in bad shape for years with frequent patches, but the past winter has created a need for a complete rebuild, Yanez said. Council agreed to his request to authorize paying for the estimated $28,000 repairs with the year's street improvement budget, with the expectation those funds would be repaid for money from the bond issue.