MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
JULY 2, 2009
Chairperson Neuzil called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 2:00 p.m. Members present were: Pat Harney, Terrence Neuzil, Sally Stutsman, and Rod Sullivan; absent: Larry Meyers.
County Treasurer Tom Kriz said Budget Coordinator Rich Claiborne put the figures together for options to finance the 120th Street project through Shueyville. Claiborne said he spoke with Bond Counsel Bob Josten regarding the proposal. There is a new section of the 2009 Code that they do not have yet that will allow road/bridge projects to fall under general county purpose as long as the County owns the road. Johnson County is responsible for the road in Shueyville so there is no limit on bonding. He said Josten reviewed the proposal from Shueyville and identified some red flags such as a non-appropriation agreement. This means the City Council could choose not to appropriate payment to the County one year and change their decision the next. According to Claiborne, Josten said if the Board is serious about the project, the agreement will need to be rewritten so that it is enforceable.
Claiborne said Shueyville has a very small budget and population, therefore, all they can afford is a 20 year bond which does not make financial sense. If the County decided to bond on their behalf the handout shows a comparison between a two or three year bond. With the two year option, the freed-up column shows a series of bonds that will retire, and in FY11 and FY12 almost 15 cents will be freed up. If the County decided to bond 20 or 21 cents, the debt levy would increase by roughly six cents. It may not increase, because the figures are based on FY10 valuation. Johnson County has never had a valuation decrease. They always get the previous years, if not an increase, in percentage. The six cents could be a little heavy as it could be only a few cents increase. However, if they go out three years, in FY13 another series of bonds retire freeing up another dime or so. This shows that another quarter has been freed up, and there would be an 11 cent decrease in the debt levy. His opinion is the Board should consider the three year option, because there is less of a shock each year. If they keep it level, there may be a decrease which the Board likes to see. Regarding the Shueyville payback and their payment schedule, over time the funds would reimburse the General Basic Fund so there would be a sense of fairness. When bonding, all tax payers pay whether city or rural. However, they can set the revenue stream back to Central Services, which is in the General Basic Fund. Each year they would have $40,000, $50,000 or $130,000 coming back into General Basic. If the County does not spend that, it will go into reserves and earn interest. At a minimum the County will get $1.787 million back from Shueyville.
Sullivan said the difference between what they would get back from Shueyville and what they would spend is approximately $600,000. He asked how they reconcile not having this amount come out of the Rural Fund. Claiborne responded County Engineer Greg Parker had prepared a write up regarding that, and he is responsible for the maintenance on that road which is approximately $300,000 per year. In essence the Rural Fund/Secondary Roads can be thought of as the same thing. Parker’s budget would be saving that amount in maintenance on a deteriorating road. Sullivan said there is still money the County is fronting. The City people are paying into it, and there is still a $600,000 difference the way he sees it. Claiborne agreed and said those funds could be recaptured at budget time if the Board decided to transfer from the General Basic to the Rural Fund.
Neuzil asked if this project is worthy of going outside of the normal process to fund it. From discussion at the last meeting, he was starting to lean against the idea of bonding the Shueyville project. He is concerned about a number of other projects including the Ambulance facility, the Justice Center, the Conservation Bond, and the Sutliff Bridge. He asked if instead they should look at the Five Year Road Plan and see if it can be slipped in and bump something else off.
Claiborne said another option would be to take the money out of the Rural Basic levy. If it was done for $1 million for 2 years and a split was done with Conservation Director Harry Grave’s budget, it would result in an 85 cent hike on the Rural Basic levy. Stutsman said there are not as many tax payers on the rural side of the budget so that will have an impact as well. Neuzil said it might be difficult to justify to the rural folks that their taxes are going up significantly to fix a road in the City of Shueyville. Kriz said the biggest concern he has with the project is the qualification in the 28E agreement that states, “capital projects for construction, reconstruction, improvement, repair, equipment, bridges, roads and culverts. If such Capital Projects assist in economic development which creates jobs and wealth…” Claiborne said Josten said they could probably do it. Kriz agreed but said it is on the edge.
Stutsman said the minute this road is fixed, Shueyville will annex it and it will no longer be a County road. The County never fixed Deer Creek Road for that very reason. Sullivan said he thought part of the agreement would be that Shueyville would not annex it or the County would not do the project. Neuzil said their ability to annex a couple of subdivisions in the County would put them over there. Sullivan said if they are going to do this, they should have those protections built in to the agreement or they should not do it. Neuzil said he envisioned going through the normal Five Year Road process rather than bonding. They would come up with an agreement with Shueyville where they would pay back the County a portion of those funds. Stutsman said she needs a chalkboard to write down the commitments they have made. By giving a little here and a little there, it is starting to add up. She said they just approved $120,000 for a truck. Now they are talking about this project and the Oak Crest Hill Road project. She needs a big diagram to see where they are and what kind of impact these commitments will have on the budget.
Neuzil said these questions fall under item three on the agenda to discuss the Five Year Road Plan and what is realistic for the next two or three years. His suggestion is considering the impact of bumping off year four of the project and adding the Shueyville project as an alternative to bonding for it.
Kriz said the numbers Claiborne has put together show that the project can be done. The biggest concern for him is the wild card that is out there, which is the $20 million Conservation Bond. While the approach is $1 million, if $8 million came up in any one given year that needed to be purchased to be done, the County will have to bond for that. It is a card that is out there that is unknown. Not that it would happen, but it certainly could happen.
Stutsman said she spoke with Claiborne, and the Conservation Department will be asking for over $1 million this year. Claiborne responded yes. Graves has two projects that total a little over $1 million. He will be dipping into his trust account but will replenish that account when he bonds again. Harney asked if Grave’s bonded for $1 million this year and plans to bond for more than $1 million next year. Kriz said there is no way to know what may come up as they look to purchase property. If it was a static million, it could be done; however, there is no consistency. Stutsman thinks there is no interest from the Conservation Department in working with the Board to try and manage those issues. They are an independent board, and they are going to do what they want to do when they want to do it.
Harney agreed with Neuzil it would be a good idea to work the project into the Five Year Road Plan. He wants Shueyville to pay back the funds to take some burden off other areas of the County. Sullivan suggested they could still try to get an agreement with Shueyville to pay the County back. Stutsman said she thought they were going to pay the money back and asked if that is uncertain. Sullivan clarified if the County does not have an agreement with them, then they are not obligated to pay anything. It is technically the County’s road and the County’s responsibility to fix until Shueyville’s population reaches 750. The question is whether the County should repair the road or try to enter into an agreement with Shueyville that will hopefully recognize that the County is in a unique position. He would like to pursue an agreement.
Harney asked Chappell about the red flag and the possibility the County cannot collect. If there is a 28E agreement that they have signed, can the County hold them to that. Chappell said he has not spoken to Josten about this issue. He did not see the language Josten is referring to, but he believes it is the language in Section 9, III. Chappell read from the 28E agreement which reads as follows, “Provided, however, that in no event shall the City ever be obligated hereunder to provide reimbursements to the County that will result in the City exceeding its constitutional debt limit.” He assumes this is the same agreement Josten was referring to. There are a lot of concerns about this agreement. The agreement does not set out what they are required to pay. Not only are there blank spaces for the amounts and percentages, but it also does not say they promise to spend every bit of their TIF money that is not already committed to other projects. He said he does not know who drafted the agreement, but there are odd references to other provisions. The provisions are dealing with special assessments, which the County has never done. He agrees with Josten regarding the red flags, and the County should pay heed. He suspects he and Josten are thinking along the same lines.
Stutsman said she thought the purpose of this meeting was to determine how to set up the agreement with Shueyville, and now the Board is talking about the County repairing the road and paying for it without asking Shueyville to pay it back. Neuzil responded no, his issue is whether or not the Board should bond for this project. If the County does not bond for it, can it be added to the Five Year Road Plan with the agreement the City will pay that fund back. It would be similar to agreements with other communities in the past. Sullivan gave Hills as an example. Neuzil said they are not planning to start paying the County back until their community project is paid off and a new TIF starts. Stutsman asked where the County would get the money in the interim. Neuzil said it would be the same process as the Cheese Factory. It is in the Five Year Road Plan, the County is doing the project, and they are paying a portion of it. The question of when Shueyville pays the County back is the issue. Stutsman asked Parker if he could absorb this project in his budget in the next 1-2 years to cover the $1.2 million. Parker clarified the project estimate is $2.4 million.
Sullivan said if the Board decided to put the Shueyville project in the Five Year Road Plan, there would be no way it could be done prior to FY12. Neuzil agreed and said maybe they could do minimal repairs until that time. Stutsman asked if Shueyville is aware the project would not be completed until later. Neuzil said Shueyville does not have an indication one way or the other. The County has not made any commitment to Shueyville. Kriz clarified with Parker that about $300,000 in repair would need to be done to the road if the County was to go ahead with the whole project. The project would have to be in the next fiscal year, not the one that is just starting now. Parker replied over the next two years the County would be investing approximately $300,000 to $350,000 in patching. This is a big investment for something that they will be tearing out in two years. Kriz said they will have to do some patching; however, if they know the road is going to be replaced quickly, it would bring that figure way down.
Sullivan asked what would be done with $2.4 million. Parker responded the project includes a section in the City that will be urban, so curb and gutter, and the County portion will become rural, which would be open ditch. When entering Shueyville from the west, there will be open ditch and then it will go to curb and gutter. Sullivan asked if they were going to have a sidewalk. Parker thinks there was going to be a sidewalk on one side of the project, and they were going to design it for constructing a sidewalk on the other side at some time in the future. Sullivan asked if there would be six to eight foot shoulders on each side.
Parker replied for a rural cross section design, they would have to have standard width pavement with six foot shoulders off the edge of the pavement. Whether they are paved or not would have to be determined later. Sullivan said part of his concern is he drives this road a lot and it is very narrow with no shoulders. Given the traffic count, it is a bad spot. If there is going to be a full-blown reconstruction, it certainly needs shoulders. Harney said their plan includes shoulders but not sidewalks at this time. Sullivan asked if the City section will have the sidewalk. He wants to be sure they have the right-of-way set aside for the sidewalk. In 20 years they are going to want the right-of-way but will not be able to go back and buy it. Parker responded to Harney he thought the design was to accommodate future sidewalks. Sullivan said his concern is that they buy the adequate right-of-way so they do not have to try to purchase it later. Stutsman said the right-of-way is the expensive part. If they are going to purchase it now, they might as well go ahead and do the sidewalks.
Sullivan said Johnson County Council of Governments (JCCOG) has a complete streets policy that might be worth discussing if the County is going to lend money to Shueyville. Harney said JCCOG laid out a plan they thought was too costly for them so they narrowed it down considerably. Neuzil said the Board needs to decide whether they want to pursue bonding with a payment plan or put another road project on hold while this one is completed and work on a plan to be partially paid back for it. He restated he is leaning more toward adding this project to the Five Year Road Plan than toward bonding, because of the Board’s previous conversation during their recent Strategic Planning meeting.
Kriz said the payback that Shueyville is considering is 20 years with very little paid in the first 10 years. Harney said his concern is who will be paying interest on the loan. Neuzil said it would be part of the payback schedule. Stutsman said she needs to know which project will be bumped from the Five Year Road Plan to add the project in Shueyville. Neuzil agreed.
Parker said $2.4 million includes a fee for an outside consultant to handle the design and all the construction management, which is about 15% of the total project. If that project is shifted into the Five Year Road Plan and other projects are moved out, then those issues would be handled in-house and would reduce the cost. If the Board decides they would like to add the Shueyville project to the Five Year Road Plan, they need to consider the Farm-to-Market funds. Currently the funds are on hold until January 1, 2010. The hold may be lifted or it could be extended. If the Board is considering shifting projects, Mehaffey Bridge Road is $950,000, and the Hills to Utah pavement rehab project is $2 million. They were planning to use considerable Farm-to-Market funds to cover the expenses for those two projects. There is also the Recreational Trail, which has an estimated cost of $750,000 and would come out of the FY11 budget. Stutsman asked if the trail is on Mehaffey Bridge. Parker responded yes. He said the trail would run parallel with Mehaffey up to the bridge replacement. Stutsman said it is frustrating that Conservation has money. She asked why they are not building this trail. Parker said he does not know. Federal funds have been designated for the project and they are hoping for additional funds. They are matching the funds with local or Farm-to-Market funds to construct the trail.
Parker said the Herbert Hoover Highway project is in the plan for the following year. Neuzil asked in what year that project is planned. Sullivan replied FY12. He said he likes the Five Year Road Plan up until FY12. Then he starts to have issues with the projects that are included in the plan. Herbert Hoover is one of those projects. He understands the road needs shoulders, but it has a brand new top on it and is parallel to Interstate 80. Harney agreed and said he drove the road recently and it has a good surface. Neuzil said when they brought this up in the past, Assistant County Engineer Al Miller said a large portion of the funding would be a safety improvement project with separate dollars. If there is a huge outside resource that is going to help pay for the project, they need to consider that. Parker said they do not have any funds designated for this project. He thinks what Miller was referencing is that Herbert Hoover Highway is a transferred jurisdiction road. Just before the State transferred it to the County, they put an asphalt surface on it. They did that because they were doing work on Interstate 80 and needed to shift traffic over. In advance of that, Miller spoke with someone at the Department of Transportation (DOT) and told them these conversations were going to occur once they resurfaced the road. The surface is really ok, but the road is not in the Five Year Road Plan because of the surface. It is in the plan because of safety concerns and a high incidence of fatalities.
Harney said they could drop the speed limit on that road. It is not going to make people slow down but could cover the liability. Sullivan said he still thinks Sharon Center Road is the County’s most dangerous road statistically. Stutsman said she thinks there was one fatality on Sharon Center Road where weather was a factor. She asked if there have been more fatalities on Herbert Hoover. Parker replied that since the plan was approved this year, there was a head-on collision. Sullivan said he cannot justify keeping the Herbert Hoover Road on the Five Year Road Plan, based on the condition of some of the other roads. Neuzil said he agrees unless, as Miller pointed out, there is some major funding for which this project seems eligible. Parker said it is eligible, and they are trying to procure as many outside funding sources as they can to minimize the local and Farm-to-Market funds. In most cases, the County is still required to match something from their own budget. Typically it is an 80/20 match or less, depending on how anxious the entity is to get the project completed.
Harney asked how many road projects they have submitted applications for to request stimulus funds but have not heard back from. He asked if the funds will help off-set these projects if they are received. Parker replied the only project that was submitted was the bridge project. Stutsman said the Hills Road South project is part of the stimulus. Parker said of the additional monies they had received through special request, the bridge project was the only one submitted. It is $4.4 million, and they will hopefully get 80% of that amount. Neuzil said the Board needs to decide whether they want to come up with some outside money to pay for the project or continue to do what they are doing within their current process. Ultimately, that is the Board’s policy decision.
Stutsman asked Claiborne if they can access TIF districts if they put this on the Debt Service levy. Claiborne replied yes. She asked why they would take the money out of the County's budget when they can have Shueyville help pay for the road with their TIF district. Neuzil responded that it has an impact on the levy over a period of time. It also means if anything is added to the Debt Service, it is going to impact it even more. It would include Ambulance and Conservation. Stutsman said maybe they cannot do some of the projects then, and they will have to wait.
Neuzil agreed and said it comes down to prioritizing what is more important. Sullivan said sometimes the process of repairing a road outside of the typical road process can open a can of worms. The Board could be asked why they would not handle Herbert Hoover the same way or bond for other projects. The answer is they have not been handled this way because there is a process. Shueyville is a little different, because they would be paying back the County. Neuzil asked if they should just give $300,000 over the next two years to upgrade the road and wait for Shueyville to reach the minimum population requirements.
Stutsman said her understanding as to why they were interested in paying back is because they want the road completed sooner rather than later. Sullivan said he has no hesitation putting this project in FY12. He does not know how that fits with Shueyville’s timing. He said he does have some issues with the last couple of years of the Five Year Road Plan. Stutsman asked Parker if he knows why Shueyville is anxious to have this road completed. Parker replied he does not have a response as to why they want it done so fast, but they are asking a lot of questions as to why the County is not patching the road. The people in Shueyville had suggested they apply the money that would be spent on patching toward reconstruction.
Harney said the area has been deteriorating badly, particularly out near the Interstate. There have also been a lot of accidents. Neuzil restated it comes back to the question of what is more important, is Mehaffey Bridge Road more important than the Shueyville project. He said he does not know if it is or not. He asked if the Herbert Hoover project could be held back. It still comes down to a policy decision, and does the Board want to get into the business of trying to bond for a road project. Bonding raises taxes, it increases debt, and it means less rainy day money. It does all of the things the Board said it was not going to do. Harney said he does not particularly like the bonding issue, because he thinks there are too many other projects that are bonded for, such as buildings. On the other hand, bonding is something that has just been made available to the Board.
Kriz said Neuzil is right and what he thought came from the previous meeting was to set the repayment schedule and pay off the Health and Human Services Building. There will be another couple of bonds retiring, which will reduce the debt and clear the way for some bigger things. He said if they keep adding $2 million here and $2 million there, they are not doing that. Sullivan said they also risk losing their bonding capacity as a safety net. In the event of a tornado, they will probably have to do some bonding. Kriz replied the County has the capacity, but there is a long range cost involved in continuing to spend the money, bonding each time, and not building up reserves.
Stutsman said the Board, in the last couple of weeks, has not said no to any project that has been brought before them. It can be discussed on some level that the Board should be careful; however, when someone comes in with a project, they do not say no to anything. Money that came in for Conservation could have been put into reserves, but instead the Board agreed to put it back into their budget. Similarly, the money from the Prairie du Chien purchase is being used to buy a new truck.
Sullivan said he is not interested in bonding, but he is interested in looking at adding the project to FY12 of the Five Year Road Plan. Neuzil said if they are going to invest $200,000 to $300,000 in this, he would put the project out further. If Shueyville has not reached the pivotal point in regards to population, they would at least be closer to having the ability to pay the money back. Harney said he thinks the road needs attention before then. Neuzil asked Harney which project he would take off the Five Year Road Plan. Harney said they could push back Herbert Hoover Highway. Neuzil said even though the projects are on the Five Year Road Plan, it does not necessarily mean the project will be completed in the particular year listed.
Parker said they have had several projects that have been blocked because of environmental permits and other things that are out of their control. They keep a heavy load of projects, because they want to have a fallback if they cannot get a project through. Stutsman said she would support the Debt Service approach rather than investing money in maintenance between now and FY12. They could access TIF districts to help pay for the project. She said it appears the majority of the Board wants to bump another project off the Five Year Plan.
Neuzil restated they could bump the Mehaffey Bridge project and replace it with this one. Harney said he does not want to do that. Sullivan agreed. Neuzil said he brought that option up to demonstrate how to avoid the potential of the $300,000 spent on repairs. Harney said they can get by another year or two on the Mehaffey Bridge Road, but if they do get the stimulus money, they need to invest that money into the project or they will jeopardize the funding.
Neuzil stated it seems the majority of the Board is not interested in bonding for the Shueyville project. There is an interest in potentially adding this project to the Five Year Road Plan. This should give Parker some direction in communicating with the community of Shueyville. As far as where to place it within the plan, there are not yet three Supervisors who have said FY12 is the answer. He has heard from two. He does not know where Meyers is on this issue. Stutsman asked Neuzil why he wants to add this project to the Five Year Plan instead of using debt services funding. Neuzil responded he is uncomfortable bonding for a road. Sullivan said to Stutsman that she said the Board has not told anybody no and here is a $2.4 million no to somebody. Stutsman replied they are not saying no, they are just postponing the project. Neuzil said the Board has never bonded for a road project before, and he feels uncomfortable about it. Parker said the option to bond was not available to them until last year so they could not have done it prior to that time. He said it is another tool available to the Board if they get into a bind on a project. If they need to get a project done, this option could pay for it.
Stutsman asked if the funds to cover the entire project will come from the rural side of the budget. Neuzil responded no, because a portion would be paid back by the City of Shueyville. It is similar to the way in which they handled the Cheese Factory road project, in the sense that a portion is paid for out of the rural fund and a portion is paid for out of that business. Stutsman asked if they are expecting Shueyville to pay for the project even if they bond it. Neuzil said yes, but fundamentally does the County have the right to use the General Fund to pay for a rural road. Stutsman agreed but said they could still access the TIF dollars. Parker said the amount of local dollars, which are General Fund dollars, for the projects the Board has mentioned are a very small portion of the projects. The large match dollars will be coming from the Farm-to-Market funds which are Road Use Tax Fund dollars. This determines what the Board has to match in the Secondary Roads budget.
Harney said he is not clear on the dollars that come from the Road Use Tax Fund. He asked if they would not necessarily need to bond for the entire amount if there is money from Road Use Tax dollars. Parker said no, he thinks they are talking about two different funding sources. One option would be to include this project in the Five Year Road Program and bump other projects out to include it and get it done. If they do that, then out of the Secondary Road’s budget they are matching 80% to 90% of that project with Farm-to-Market funds, which means projects are getting shifted out that they would have spent those dollars on. If they decide to bond the project, that money does not come from the Secondary Roads budget.
Kriz agreed and said once they bond for the project, the money would come from the Debt Services levy which would attach to all places. It is completely different from Parker’s budget which comes out of the Rural Fund. Parker said another portion of funding is the City, which has offered to pay back roughly $1.8 million over 20 years. If those funds came from the Secondary Road’s budget, then he would hope those dollars would come back to Secondary Roads to help relieve the pressure of funds paid out so those dollars could be extended to another project in the future. Harney said he thinks Kriz is saying he prefers the County does not bond for the project and Claiborne is saying bonding can be done. He asked Parker if he prefers bonding.
Parker replied that he sees two options. One option is to add the project to the existing Five Year Road Program by shifting projects out to accommodate the costs. The other option would be to bond for the project and get it done next summer. It would mean those dollars would not be immediately coming out of the FY11 budget, because they would be making progress payments for construction for up to six months. Harney said he would not mind bonding for it if it was not going to take 20 years to be repaid. Kriz said it has to be 20 years, because Shueyville has tied up all of their TIF dollars for the next 10 years to pay for their Community Center.
Harney said Claiborne is saying the County can pay it off in less than 20 years, even though Shueyville will be paying the County back for a longer period of time. Neuzil agreed and said Claiborne is talking about a two or three year principle, but it would mean the County would tax for an additional $1.2 million out of Debt Service. He said the Board saw what happened last year when they took $300,000 out of last year’s budget. Sullivan said if they went three years, it would be 14 cents. If they went two years, it would be 21 cents. Kriz said he does not think Claiborne is advocating that they bond for the project, and he is not saying they should not bond for it. These are just the options. This is the first time the Board has had the option to bond for roads. He asked if the Board is going to set the precedent and use this option more often. Stutsman said this option is made for a situation like this. This is not something the County planned for, but it came up. It was not a tornado or storm, but something the community came and said they need. They said this is a way they are willing to help get it done. She asked if the Farm-to-Market funds are guaranteed. If they move in another project, will those funds still be available.
Parker said no the funds are not guaranteed. They anticipate those funds will be available, but the issue is the two stimulus projects that came in. They are glad to have the stimulus funds; however, they have to match those projects with other fund sources. The only fund source they have to go to, like every other county in the State, are the Farm-to-Market funds. That fund only receives so many dollars per year. The DOT controls those funds, and when it starts going down, they realize they have many obligations out in the future that they do not have money in the bank to cover. So they freeze expenditures, especially for those Counties that would be in a negative balance. Within the next 18 months, Johnson County will be in a negative balance. It is unfortunate, but that is the way the process works. The DOT has definitely put a freeze on those funds until January 1, 2010. They have expressed that if the projects go the way they are anticipating, they may extend that date.
Stutsman asked Parker what he would prefer the Board do. Parker responded they have a couple of unknowns. One of them is going to be how the Farm-to-Market funds source is handled. This is a fund source option available to the Board to consider as another way to fund the project. This is an option that would not shift other projects off the current Five Year Road Plan. It is something they could move ahead with for construction next year, as the City has requested. That is a plus. The negatives are all of the things that Claiborne has been talking about and the town has been talking about. They include bonding capacity, future debts, and a 20 year repayment schedule. There are pluses and minuses to both sides of this project. The good thing is the City is willing to pay back almost $1.8 million toward this $2.3 million job. This means approximately $116,000 in interest over three years.
Parker added the County does have a section of the roadway that is within County jurisdiction. They would have to pay for it if the City were to approach Secondary Roads to do the project. This would be similar to the arrangement being worked out with Hills. Currently, the Code requires that the County maintain the road that is in the County’s jurisdiction until Shueyville achieves a population of 750 or greater. These are a lot of issues to consider, but a 20 year pay-back schedule is probably not something that would be a favorable option. However, it is approximately $1.8 million that would eventually come back to pay for the project, which does not normally happen.
Neuzil said that Chappell’s report points out a lot of the pros and cons and is very helpful. Parker said the road needs some work, and they are going to have to start some patching. It is unfortunate the legislation passed five years ago requires the County to cover these roads. However, the amount of work that needs to be done to that surface requires a different conversation as far as patching. By putting the amount of patches that may need to put into this road, they may need to discuss evading the 3R design guidelines. All they are trying to do is patch the road so the County does not have to upgrade the road and widen the shoulders. Neuzil said the State did not have a problem with that. Parker agreed and said the State did not have a problem with Herbert Hoover.
Harney asked if Cedar Rapids is responsible for the intersection at Highway 965 and 120th Street. Parker responded yes, they are responsible for half of it. Harney asked if that would come off of this project. Parker said no, it is a different project. Sullivan added this project only goes to approximately Interstate 380. Parker said this road is in bad condition, but there are other roads throughout the County that are in bad condition. He named Oak Crest Hill and Highway 965. He said 520th Street East of Hills is going to start needing attention. It is a trade off. If one project is completed, then another project will be put on hold and more maintenance dollars will be spent.
Stutsman said that is a consideration, and if they put this project off, how much more will it cost in four years. Parker said if they hold off construction for any project, he is seeing 20% to 30% increases annually. Neuzil asked if they should bump a project earlier than 2012. He said the only project that really comes out of there would be Mehaffey Bridge Road, which no one wants to consider. He said he would have to give that some thought too. On one hand Mehaffey Bridge Road is in better condition than Shueyville’s, but they need to consider those who travel the roads and the worthiness of trying to match it up when the bridge project is being worked on.
Harney said he would have to rethink it too. Parker said there are three large projects in FY11: the Mehaffey Bridge, the actual road rehab, the trail, and 520th Street from Hills to Utah Avenue. There are a lot of financial commitments and options for the Board to consider. Stutsman said she has not changed her mind. Neuzil said if there were two members of the Board interested in bonding the project, then they would bring in Meyers. There does seem to be interest in adding this project as a part of the Five Year Road Plan with further discussion to determine where to put it in. Sullivan said he is in favor of that option. Neuzil said there may be room to negotiate with Shueyville if they did add this project two or three years later. There will need to be some patch-work in the interim. Parker said the patch-work is a given.
Stutsman asked if they would reconsider the project if they do not get the Farm-to-Market funds. Parker said if they put this project in the Five Year Road Plan with a plan to complete it in FY11 and kick other projects out, there is a possibility that the Farm-to-Market funds may not be available. This could be the same for the other projects in the plan now. Stutsman asked if the entire cost of the Shueyville project would come from County tax dollars if that happens. Parker said yes or they could hold the project until Farm-to-Market funds become available, which would be out of their control. Stutsman added they would patch more in the meantime, and costs of the project would increase. Parker replied yes.
Harney said he will need to review this proposal in more detail before he can say yes or no to the bonding option. Kriz asked Parker if the Mehaffey Bridge project is scheduled for 2011 and the Herbert Hoover project for 2012. Parker replied yes. Kriz asked if patching would still need to be done if the Shueyville project took either of those slots. If it were done in 2011, would that change the amount of money they would have to spend on patching. Parker said they would absolutely reduce the amount of patching if it were done in 2011. He would not want to make that type of investment and then rip it out. They would probably do a band-aid repair. Sullivan asked if they could band-aid until 2012. Parker said they could probably blade patch asphalt in some areas if he knew he was going to do construction the next year. If they are talking two or three years out, he would have to do some full depth patching and maybe some blade patching. The next year he may be doing the same thing over again. This is why it is important that he gets a feel for how they want to proceed. If they are considering next year, it will change his maintenance plan for that area. A blade patch will generally last one year or maybe longer, and the full depth patching is a more permanent repair.
Kriz asked if bonding and the Mehaffey Bridge would require the same type of work, because they would both come up in 2011. Parker said if they decided to bond for the project, he would do blade patching and hold it together until the next year. Kriz asked if he would do the same thing if the Shueyville project was moved in place of the Mehaffey Bridge project. Parker replied yes. Stutsman said it is ironic that the only reason Shueyville wants a 20 year schedule is because of their TIF, but yet the County is not willing to access those TIF dollars by doing the bonding.
Neuzil replied the biggest issue of bonding is that it will require raising taxes for next year at $1.2 million for the two year plan or $800,000. When the County bonded for Conservation, those costs were absorbed by cutting other departments in order to hold taxes down. Now the Board is looking at continuing to do that if Conservation comes in with another $1 million. He asked if the Board was prepared to do that again and start FY11 in the hole either $1.2 million or $800,000 in expenses, if they decide to bond. Stutsman said the Board continues to say the County needs an Ambulance facility. Neuzil replied he is just reminding them what projects are out there. The bond option would make it even harder to think about any future space needs. It also means that the rainy day fund is not going to happen. It could also mean a tax increase is likely. These are three things that were brought up at the previous Strategic Planning Meeting that the Board was not in favor of doing.
Harney said the decision is whether or not they let the Conservation bond issue tie their hands for something they would normally do, or should be doing, just because the voters passed the bond. Do they expect the County to give up roads and other things. Neuzil said it was decided last year they would cut their own services to pay for the bond issue. The County basically covered the $1 million by cutting budgets so taxes would not be raised to cover it. Stutsman said she thinks the Joint Communications Center impacted the issue too. Kriz said this is uncharted, because the County never borrowed money for years. Then they started with little one year notes, then three year notes, and now eight year notes. Stutsman said other entities have a lot of money borrowed and do not bat an eye. However, the County tradition has been very conservative.
Stutsman asked if the Board is under a time limit to consider the bond issue. Kriz said they are not from his perspective. Parker said it would be helpful for him to know where the Board would like to go with the project. Sullivan said he has been biting his tongue for the last hour. He thinks if they are going to consider this project, they should do it during the budget cycle. When they sit down at budget time, the conversation is going to be totally different than it is right now. He is interested in the project but not through bonding. He would like to see it added to the Five Year Road Plan. He thinks it is more worthy than a couple of the projects that are currently in the plan. Stutsman said he made a good point, and maybe they should consider this within the budget cycle. For a long time, the Board said they would not consider expenditures unless they were in the mix with everything else. Maybe they should wait and consider this request when they consider the Five Year Road Plan and the Secondary Roads budget. Neuzil said if there are three members of the Board who want to consider bonding and they did so during budget time in December, Claiborne could start preparing the numbers to show the impact with it in and with it out. The Board can then make the determination as far as what gets put in or taken out.
Stutsman said it will be helpful to see the tax statements so they have an idea regarding its potential impact. Neuzil said they may know more about how much money the Conservation Department is going to be asking for in the upcoming fiscal year. If they are back to $1 million, that is easier to stomach than if they are coming in with $2 or $3 million for identified projects. Kriz said there could be a year when they do not request any funds. Neuzil said it would be nice to be aware of what they are planning to spend, and he would like to get them on the agenda. Stutsman agreed there should be a joint meeting between the Conservation Department and the Board of Supervisors. Sullivan said, in fairness, Conservation does not always know what property will become available, particularly when someone dies and a family member decides to sell the property. Stutsman said it was pointed out to her that the Board does not have any idea what the Conservation Department’s plan is for that money.
Neuzil stated there has not been any unanimous direction from the Board. Stutsman said she would like to discuss this issue at budget time. Sullivan said Harney was asking for more time to consider the project now. He asked Harney if he wants to wait and discuss it further at budget time. Harney said he would like to see the road done, but he would like to have more details from Claiborne regarding the bonding details.
Neuzil asked if there are three members of the Board who would like to table this discussion until budget time and consider it at that point. Sullivan, Stutsman, and Neuzil said yes. Parker said this decision gives him direction. Harney said other things have come up, such as job descriptions and job changes, that the Board should have had come back during the budget cycle for consideration. Stutsman agreed and said this might be an opportunity to bring back that process. Regarding the impact on taxes, maybe the costs could be spread across more entities rather than just the rural side of the budget. She would like to see those numbers. Sullivan asked why they would tax everybody. Stutsman replied if the funds are taken from the Debt Service levy, it would be off the TIFs. Neuzil asked if the Board wants to get in the business of bonding out of the General Fund or the Debt Service Fund to pay for a rural road project. Kriz clarified if they bond out of the General Debt Service, it will attach everyone. Stutsman said this project is not a rural road. Sullivan said it is a rural road in terms of how they need to pay for it. Stutsman said in semantics it is a rural road; however, it goes right through a city. Neuzil said at this point there are at least three members of the Board of Supervisors who are not interested in moving forward on this issue until at least budget time, likely in December or January. Parker reminded the Board this proposal is provided by the City of Shueyville, and he will relay this information back to them.
Adjourned at 3:18 p.m.
By Nancy Tomkovicz, Recording Secretary