Belleville foresees work on city streets next construction season

On Monday, Oct. 3, after an hour and 24 minutes of discussing how to finance the upgrade of city streets, the Belleville City Council agreed to get more financial information, talk to its engineers, and then set up a public meeting to discuss options.
If all goes well, the public meeting will be before the holidays and the project will move forward to take advantage of next summer’s construction season.
The council held a special work/study session on the street financing at 6 p.m. Monday before the 7:30 p.m. regular council meeting.
Most of the talking was done by Tom Colis of Miller Canfield and Kari Blanchett of PFM Financial Advisors who spelled out what financing was available to the city under the law.
Since the proposed upgrading of city streets was estimated at about $10 million and the city’s present bonding capacity is just $4,868,862, other options were discussed.
One of the best options seemed to be having Harbour Pointe subdivision, which has the worst streets in the city, and Victoria Commons subdivision, which has some bad streets, request Special Assessment Districts. Under the SAD, the property owners would request the SAD and pay for the street work, with the pledge of the full faith and credit of the city.
Also, another SAD could be set up for one or more other sections of the city.
All of the SADs could be issued at the same time, but costs would be different for property owners, depending on the work needed in that particular district.
Under a SAD, those properties that don’t pay property taxes, such as schools and churches, would be required to pay their share for the street work, since they utilize the streets.
Councilman Tom Fielder pointed out that the city has 25% of its properties non-taxable.
It was uncertain whether the property owners would pay by frontage foot or just have all the parcels counted and the cost for their separate SAD divided among them.
Blanchett, who is the city’s financial advisor for the project, said she would be able to get more precise numbers together in about a week.
City officials and the consultants would talk to the city engineers to isolate clusters in the city where the roads are the worst in order to set up SADs there.
The city council’s second public meeting on the street options will be held after the general election and before the holiday season kicks in.
Councilwoman Kim Tindall said, “The city could ask for everything it wants in a bond election, like $10 million, and only do what we can. We could pick any random number. We have no obligation to issue the bonds.”
Colis agreed that a bond could be approved for everything that is needed and after it is approved, the consultants would only allow what is legal in size to be issued.
Any random number could be chosen because there is no obligation to issue the bonds, he said.
Colis said there have been bond issues voted into place and never issued.
Also, he said, in one instance bonds were voted into place and then World War II came and they weren’t issued. After the war the municipality went forward to issue the bonds and citizens objected. A court said the bond approval was still good and they issued the bonds.
Colis said as an option, the city could have a vote to increase the tax limit in the city charter from the 20 mills limit. City Manager Kollmeyer said the city is already at its charter limit and because of the Headlee rollback it is now limited to 16.5 mills.
Colis said municipalities across the state are looking at combinations of financing to do infrastructure work.
“We’ll scrape in different pots and see what can happen,” Colis said.
“It’s difficult for small communities,” Blanchett said. “There’s not so many ways they can go.”
Colis said he would look at a bond, something the city can tackle with the funds available.
“Maybe we can just take a bite of the apple, and not eat the whole thing at once,” he said.
“You may be able to sequence bonds every three years,” Colis said.
Blanchett said she could estimate how much the future value of property in the city would be.
“If we do it in smaller pieces and go back to the voters next year and then the next year, that’s a recipe for disaster,” said resident Mike Renaud.
Colis said the whole program would be voted at once and the bonds would be authorized in sequence. He said if, for example, voters authorized $100 million in bonds in sequence, after three years they would reevaluate the debt limit. Just because they are approved, doesn’t mean they will all be issued, he said.