'Roads can't wait': Councilman says city should bite bullet now
JANESVILLE--A $38 wheel tax increase is one way the city could begin closing the gap in its lagging street maintenance program, according to figures requested by a councilman at a 2014 budget study session.
Other alternatives include borrowing or a mix of borrowing and increasing the wheel tax.
Acting City Manager Jay Winzenz outlined the options after Councilman Douglas Marklein endorsed Public Works Director Carl Weber's recommendation to double funding for street maintenance to avoid a crisis down the road.
The council is expected to discuss increasing taxes to fix more streets when it meets at 6 p.m. Thursday in City Hall.
Even if it doubles what it spends on street repairs, the city won't keep up, Marklein said Tuesday.
“The route we're on, we're not gaining. We're losing. More and more streets are coming online (needing repair).
“I do think it (street repair) needs to become a priority,” he said. “One thing this council is trying to do is quit kicking things down the road.”
Janesville built miles of roads in the 1990s, and those need resurfacing, Weber has said. Resurfacing before streets deteriorate too badly extends their lives.
Rather than increasing the number of streets to be resurfaced, however, past councils decreased the miles because of increasing costs.
In addition, they shifted some of the cost to reconstruct and pave streets to borrowing. Some council members in the recent past have spoken out against the practice because of the interest incurred.
The proposed budget includes $1 million in borrowing for resurfacing and reconstruction and about $1 million in the general fund for street repair and resurfacing.
Weber advocates doubling that amount to $4 million for each of the next three years.
The council would need to budget another $2 million for 2014, Winzenz said in a memo.
The council's options for funding the extra $2 million are:
--Using property taxes. That would mean “substantial reductions in service and service levels” in other areas because of state-imposed caps on the operating levy, Winzenz said.
--Increasing the current $10 wheel tax by $38 to $48. Every $10 generates about $535,000. The current tax already goes to street maintenance. At the end of three years, the additional wheel tax could be removed or continued for street maintenance, Winzenz said.
--Borrowing $2 million each year for three years and paying that debt back over 10 years. That would cost the owner of the average home assessed at $120,100 an additional $15.97 each year for 12 years to pay off the debt. The city would pay $765,000 in interest over 12 years.
--Borrowing the money but paying the debt back with wheel tax revenues rather than the tax levy. The wheel tax would increase $13 a year per vehicle for 10 years to repay the $6 million borrowed.
--Combining wheel tax revenue and property taxes to pay off the borrowing.
Marklein said he'd like to see the city put the street resurfacing crisis behind it.
Fixing a road in fair condition is less expensive than fixing it in poor condition and also extends its life, he noted.
“Plus, the citizens don't have to ride on lousy roads,” Marklein said. “It's a complaint I hear.”
According to Weber's estimates, Janesville has about 298 miles of roads in fair to excellent condition and 31 miles considered poor or failed, Marklein noted.
By maintaining current funding levels, the city in three years would have about 254 miles in fair to excellent condition and 75 miles in poor to failed condition.
Doubling spending would result in 276 miles of road in fair to excellent condition and 53 miles in poor to failed condition.
Marklein figures a mix of a wheel tax increase and borrowing might be the best way to raise the needed money, even though the wheel tax is unpopular.
Marklein doesn't think enough money could be found in the general fund and called the 2014 spending plan a lean budget with an employee-per-capita ratio lower than that in many cities.
If the city must borrow, now is the time because interest rates are low, Marklein said.
“If we wait 10 years, we're going to kick ourselves because we didn't take advantage of it," he said.
The city's bond rating last week was upgraded, so rates will be even better, he said.
The city, for example, just bid its 2013 borrowing. Bids ranged from 2.17 percent to 2.41 percent. The city had estimated a rate of 2.75 percent.
The lower rate reduced the interest that the city will pay by more than $530,000, Winzenz said.
Marklein said he is confident the city will remain aggressive in paying off its debt.
“Do I like to borrowing? No,” he said. “Do I see an alternative right now? No, I don't. The roads can't wait."
Study session set for Thursday
The Janesville City Council will meet for a 2014 budget study session at 6 p.m. Thursday in City Hall, 18 N. Jackson St.
Besides street maintenance, other items that could be discussed include:
--Suggestions by Councilman Jim Farrell to trim $159,941 from the general fund. He found the savings by not hiring a part-time customer service representative; delaying hiring a planner; reducing the $366,935 set aside for computer maintenance by $25,000; not hiring a college intern, $23,430; and removing $12,000 for contracted snow removal when no money was used in 2013.
He suggests adding $4,200--$600 for each council member---if anyone would choose to attend conferences or seminars.
Some could disagree because council members might only serve two years.
“I believe council members should be encouraged to attend seminars and classes that enhance their knowledge so they can do their job better,” he said.
--Cutting lap swim in favor of beautifying medians, suggested by Matt Kealy. The city subsidizes 75 swimmers at a cost of $337 a swimmer. Council members have received many emails in protest from lap swimmers, Councilman Douglas Marklein said.
--Kealy also asked the administration to report back on what the city could save by canceling night bus service. Dave Mumma, transit director, said night bus service is provided along three routes 255 weekday evenings a year until 10:15 p.m. Bus drivers can deviate from their routes up to a third of a mile to pick up residents or drop them off at pre-arranged places. In 2012, the night bus service had 19,591 passengers. Riders this year could increase by 17 percent, Mumma said.
In 2014, the service is estimated to cost $208,976. Of that, $26,400 comes from fares; $64,782 comes from the federal government; $50,154 comes from the state; and $67,640 comes from the city. That's a subsidy of about $9.30 per ride. Fares are $1.50.
Mumma said contracting with a private transit service might cost $151,112, with a city cost of $29,325. But he said more research is needed to see whether the $1.50 fare could continue.