The City Council later this month is expected to vote on a $25,000 payment to engineering firm Davis & Floyd for the creation of a master plan giving a cost analysis for capital improvements that could be paid for through a general obligation bond.
With $3.9 million worth of borrowing capacity, it’s likely a mill rate increase would be pursued to cover the debt payments, but officials won’t know just how high that hike could go until the cost analysis is finished.
City Manager Julie Wilkie said the study would take about 90 days, pushing a vote on the bond issuance into early 2020.
Wilkie and other city leaders said in August the bond is needed to help meet capital needs at several facilities, including widening bays at the Fair Avenue maintenance garage and upgrades to sleeping quarters and security features at the Main Street fire department.
“We don’t want to expend any funds until we know that City Council is ready to move forward,” Wilkie said.
City Finance Director Steffanie Dorn said in August the work could cost $2 million or more, and estimates a change an uptick of “3 to 4 mills” to the property tax rate.
“We don’t have the money sitting around to pay for that, so it makes sense to use a bond. Our only other option is to set aside a millage amount to fund capital improvements and when we get there, we could do it. But that could take a very long time, and that just doesn’t make a whole lot of sense,” Dorn said.
Through a bond, Dorn said, costs would be spread over the “useful life” of the facilities, ensuring taxpayers who are contributing to the projects are getting the benefit of the work. Some of the tax burden could be absorbed through existing capital improvement dollars – keeping the exposure to property owners minimal, Dorn added.