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Outside funding key to city projects
(by Joseph Koziol Jr. - October 12, 2012)
Outside funding key to city projects
By JOSEPH KOZIOL JR.
CHARDON – The city will rely heavily on outside funding for the majority of its future infrastructure projects.
City Council’s finance committee took a look last week at capital projects, from street improvements to added sewers, and found many will need grants or loans from state programs to get them accomplished.
City Finance Director Mate Rogonjic told the committee that about 90 percent of the projects listed for next year will require non-city funding to be done as planned. The picture looks much the same as the city moves toward 2017 with the state public works and water pollution control loan fund being relied on.
In 2013, the city will attempt to get a share of state dollars to handle engineering for road construction and sewers across a one-acre parcel that will serve as a connector road between Water Street (Route 6) and Wilson Mills Road. The new road, opposite Meadowlands Drive, was secured as part of a lawsuit filed with developer Loreto Iafelice in April 2011 that contended the city was not operating in good faith in purchasing the parcel.
As part of a settlement last year, the city was awarded the land in exchange for less restrictive commercial zoning on Mr. Iafelice’s 24.8-acre parcel and agreed to construct the road in the next three years.
The city wants to secure $95,436 for engineering on the road construction and another $14,465 for engineering on sewers across the property. Those funds are sought through the state’s water pollution control loan fund.
Another $102,663 will be sought from the same state fund to handle engineering a sanitary sewer line through land to the south and east of Mr. Iafelice’s property, which is being planned for commercial and residential development.
The same applies to $26,334 of engineering for a water main replacement project along North Hambden Street. That project was expected to be done last year, but the city was unable to win funding through the state’s public works program, Mr. Rogonjic said.
The city plans $5.8 million in capital projects in 2013, although the bulk of that is a $5 million service garage complex , a project being paid for through bonds sold by the city.
Besides needing to secure 90 percent of funding for next year’s projects, Mr. Rogonjic’s estimates in the coming years also show heavy reliance on outside funding. About 70 percent of $2.1 million needed for 2014 projects will have to come from state sources.
In 2015, about 77 percent in outside funding will be needed to accomplish approximately $1.3 million in projects. The figure is 85.8 percent for $3.4 million in projects in 2016 and 70 percent for $1.75 million in 2017.
Initially, the city will seek grants for the majority of the work, City Manager Randal Sharpe said. If unsuccessful, the city will attempt to secure loans. Neither is a guarantee, he added, as both types of funding are sought competitively by other communities.
If loans are sought, the city will have to be cautious not to take on too much debt, he cautioned.
One positive sign in the city, Mr. Sharpe said, is an increase in income tax collections. The city saw a 1 percent increase last year after seeing a decline in collections the previous year. He indicated the city anticipates similar good news this year.
Part of the city’s slim reserves for capital projects, Mr. Rogonjic said, is due to the need to supplement water and sewer operations. Although the city initiated increased rates for those services over the next 10 years, it continues to supplement those costs from the general fund.
The city will use $800,000 from its general fund to supplement water and sewer operations this year and $980,000 next year. It still will supplement the fund by $700,000 in 2017, he said.
Voters are being called on in November to help the city avoid further depleting its general fund. If voters approve a renewal and increase on a 5-mill fire levy, Mr. Rogonjic said, the city will avoid having to spend another $350,000 from its reserves to pay for a new fire contract. The city has relied on a 4-mill levy for the past eight years to fund its fire and rescue services.
Councilman Daniel Meleski told the committee the local news carried a story that morning about a church fire in Norton in which firefighters were unable to save the structure. The community failed to pass two fire levies, which caused the department to cut staff and resulted in a slow response to the church fire.
The committee also agreed to act on a request from Public Works Director Paul Hornyak to purchase a new front-end loader this year, rather than wait until next year. New environmental requirements for that equipment could add about $25,000 to the $130,000 cost.
The equipment is needed, he said, because a backhoe being used for loading salt has its engine in the front and sustains damage from salt dust. The new equipment will allow the city to remove snow quicker from stockpiles around the city, such as the piles that build up on Chardon Square.
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