Janesville city council approves $1.2-million referendum for street repair

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Marcia Nelesen
Wednesday, June 11, 2014

JANESVILLE—Janesville council members have pledged to fix the streets, but they will ask residents in November how much they should borrow to do it.

The council voted Tuesday to place a referendum question on the November ballot asking residents for permission to exceed state levy limits by about $1.2 million every year for street maintenance starting in 2015.

If residents say no, the council likely would borrow all the money, which would cost more in the long term because of interest.

Council members said state levy limits are forcing them to ask permission to levy for the money. The council must approve the wording by Aug. 26.

Members also decided 4-3 to maintain the $10 wheel tax, which raises $535,900 annually for street maintenance.

The city fixes between five and six miles of streets per year, and council members have been told the city should be fixing 12 miles a year to keep on top of maintenance.

At the current rate of repair, about 75 miles would be rated poor to fair in 2016, staff said.

The city spends about $2.2 million a year in street repair and another $1 million on curb and gutter and utility work.

Jay Winzenz, director of administrative services, said the city must spend about $4.2 million on street repair alone to catch up, meaning $2 million more in general fund spending.

But the city can raise only an additional $200,000 in taxes because of levy limits.

The council wants 60 percent of the additional money to be levied as property taxes. It would borrow the remaining 40 percent.

The 60/40 combination means a resident owning a home assessed at $120,000 would pay an additional $30 in 2015 and a total of $833 from 2016 to 2026.

The average additional cost would be about $67 a year.

Councilman Jim Farrell asked whether increased borrowing would affect the city's good bond rating.

Winzenz said rating agencies prefer that cities borrow to maintain their infrastructure rather than let it deteriorate.

Councilman Matt Kealy suggested the council consider a sunset clause, adding people might be more willing to approve the referendum.

By the time the matter comes up for another vote, residents could be seeing improvements in city streets, he said.

City Manager Mark Freitag, though, said residents probably would not see notable improvement even after six years.

Councilman Douglas Marklein said a council would likely reconsider the issue in the near future anyway to adjust for the cost of inflation.

“Really, this is just getting us through the first few years,” Marklein said.

The vote to approve the 60/40 breakdown was 6-1, with Councilman Mark Bobzien the dissenting vote. He preferred to borrow all the money.

The council opted to retain a wheel tax despite members acknowledging its unpopularity.

Winzenz had figured residents in their property taxes would pay $11 more in 2015 if the wheel tax was eliminated because the wheel tax is collected from everybody with a vehicle, even those who do not pay property taxes.

Those who voted to keep the wheel tax—Marklein, Farrell, Kealy and Brian Fitzgerald—said eliminating the tax would merely shift the tax from one pocket to the next.

“I think this is a user fee,” Kealy said. “We have to find a balance.”

Kealy said a shift to property taxes could fall more heavily onto businesses.

Bobzien and Councilman Sam Liebert voted to eliminate the wheel tax, saying they believe it is regressive.

“I think it is regressive and hurts lower-income people who make a minimum wage,” Liebert said. “Ten bucks goes a long way.”

Councilman DuWayne Severson called the wheel tax a hidden tax.

"The homeowners, when they get their property tax bill, know exactly what they're paying,” Severson said. “Then they get this one.”

Severson also worried a future council could easily double the wheel tax.

Without the tax, the city would have to replace the $535,000 in revenue it generates.

Council members barely discussed whether to assess residents for repair of streets in front of their properties.

Information showed the owner of the average, 85-foot, single-family, residential lot would pay $2,241 to fix the street in front of his or her home if he or she were assessed at 40 percent. That does not include curb and gutter and utility work.

Council members noted some residents could avoid ever paying such an assessment, depending upon when they moved into and out of a home.

Farrell said residents who live on heavily traveled roads such as Randall Avenue would be penalized over those who live on quiet, well-to-do subdivisions.

“All residents use Randall Avenue, not just the people who live there,” Farrell said.

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