Main Street concerns again raised
Council hears latest plans, cost estimates
Tuesday, February 26, 2013 7:14 AM
The Spring Grove City Council devoted most of its Feb. 20 meeting to this summer's rebuild of Hwy. 44/Main Street.
Engineer Tim Hruska of WHKS reported that MnDOT's central office has just finished reviewing the project and said that he would be meeting with them on Feb. 21.
"The plans will be printed on Feb. 28," he said. "We did incorporate the revisions as directed at your first meeting in January."
The January revisions included the removal of about half the trees and planting beds in the plan along with all irrigation systems.
At the first council meeting in March some final details between the city and state will be addressed, and then MnDOT will advertise the bids, Hruska said.
"On Friday, April 5, the bids will be opened. You will have a hard cost estimate then."
Council member Nancy Nelson later addressed Hruska on the possibility of further changes to the plan.
"In the past three months, more information has come out that we didn't know about back in December," she said, "I'm suggesting that we still need some more alternates; that we're not done cutting.
"One of the things that I think should be done is all the trees, planters and flowerbeds need to go. All of them."
Utilities director Paul Morken added, "Good idea... at least on the flower beds."
Nelson said that in recent discussions with Morken, the fact that the city doesn't have the manpower to care for all of the landscaping items in the plan became abundantly clear.
"I can guarantee that we're not going to hire any more (people) to provide maintenance," she said.
"We don't have the time to take care of them, and I don't think we're going to get the volunteers like we used to," Morken explained.
"I do not believe that we can make any more changes to the plans to get them bid that way," Hruska said. "To make additional changes, we'd most likely be doing that through a change order."
Nelson asked if MnDOT would allow alternate bids; Hruska said it wouldn't be allowed.
"If we have to come up with some change orders in advance and tell bidders in advance that 'this is what it's going to be,' then we need to start working on that right now," she added.
"The other thing that we didn't talk about is the streetlights. At a quarter-million dollars, that's pretty blooming high."
Nelson said that council member Rachel Olerud counted the street lights in the plan and found that there are two and a half times as many in the project as the city has now along Main Street.
"I'd like to see that reduced," Nelson stated.
"We're going to do your wishes to the best extent that's allowable with the project," Hruska said. "It simply comes down to what your direction to us is."
"I guess the reason that we're coming with it now is we were feeling blown off last fall," Nelson said.
"We were told in November that there wasn't any impact that we would have. Then we were told that 'you can pick out some of the things.' I'd be happy if all you did on East Main (Street) was an overlay."
"We'd be hard-pressed to even do an addendum at this point in time," Hruska said. "If you want to have changes, as soon as you have a contractor on board, you need to have a change order ready right out of the gate as you start the project.
"Most of your modifications will just be for unit/quantities. It would be more like a supplemental drawing that would be provided to them with a modification."
Hruska was asked to talk to MnDOT about some sidewalks/ flowerbeds near the southeast corner of Hwy. 44 and S. Division Ave. that come close to business basements.
Mayor Bruce Poole noted that the current sidewalk is in good shape and doesn't leak water into those buildings. He stated that some of that should be left alone rather than torn out.
"If it's going to cause leakage, it seems silly to put the beds in there," Poole said. "You'd be better off to leave the sidewalk as it is and work in front of the curb to put the water lines in."
Olerud also asked Hruska to see if MnDOT would allow the alley on East Main (across from Viking Memorial Park and between Pathfinders and HIS store) to remain open as one-way south.
Hruska agreed to talk to MnDOT about possible modifications, "We'll put together a couple options or look at what we can do."
Time for change is limited. Construction is slated to begin in May, right after Syttende Mai.
Financial analysis updated
Financial planner Mike Bubany of David Drown Associates brought the latest estimates of financial impacts from the rebuild to the meeting.
"I wanted to give you some perspective on where you sit in terms of costs," he told the council.
"It is more expensive living in Spring Grove than it used to be, no doubt about it, but compared to other communities, it's not crazy expensive."
Bubany compared six southeastern Minnesota communities in terms of property taxes and sewer and water rates.
Using a $125,000 home with 5,000 gallons of water usage per month, he concluded that Spring Grove bills would total $1,999 while the average would be $2,028.
"We don't care what other communities are doing," Nelson said. "We just care about Spring Grove and keeping Spring Grove's (costs) down."
Bubany presented two impact statements. The first was a worst-case scenario, which estimated a bonding rate of 4.5 percent and the "full impact" of the reconstruction going on water, sewer and taxes.
The project assumes a bond of $2.6 million. Actual costs won't be known in a definitive manner until after bids are let and totaled, but the estimate should be close, Bubany said.
The debt per capita for residents jumps from approximately $1,600 to $3,500 when the 20-year general obligation (GO) bond is sold.
In 2016, another large water and sewer project pushes it over $4,000 per resident.
"It will (then) kick you into the moderately-high debt category," Bubany stated.
After several years of gradual decline, the debt shows a more modest increase (to around $3,500) in 2021 when some water tower repairs come due.
Paying for those capital projects pushes monthly bills up by $20 per month between 2012 and 2014 in the first scenario. By 2021, they are $50 per month higher.
In the second scenario, Bubany used a bond rate of 3 percent, which is a more likely outcome given current conditions.
If the city cuts $40,000 of the $60,000 a year, which is currently set aside to replace vehicles and saves an additional $20,000 on staffing costs, those monies can be freed up to use towards an estimated yearly bond payment of $209,872.
That extra $60,000 per year applied to the bond makes a big dent on typical monthly bill increases, essentially flattening out the tax rate while sewer and water bills creep up. The increase by 2014 is less than $10 per month and by 2021 has reached about $27.
"The goal is to flatten the tax rate," Bubany said.
The capital project fund also grows from $200,000 in 2015 to over $500,000 in 2021 in the second scenario, similar to the first projection.
"These reports are not meant to be a plan written in stone," Bubany commented later.
"Rather, the purpose is to measure the impact of various decisions to help guide the council as they move forward."