The Ladysmith Common Council voted 6-0 Monday to allow its members to take action at next week’s All Committee’s meeting and decide on proceeding with repaving Barnett and Gustafson roads, which are part of the truck route in the city’s industrial park. At question is where will the money come from.
Gustafson and Barnett connect E. 16th Street and Doughty Road alongside Rockwell Automation, Ladysmith Machining, Besse Lumber and PJ Murphy Forest Products.
The city has received a bid for pulverizing and repaving both roads within the city limits for $444,000. An alternate bid called for another $70,000 to rebuild the two affected railroad crossing. The city wants to do this project yet this year.
City Administrator Al Christianson said he was expecting bids of about $180,000 based on preliminary estimates several years ago.
Galvanized steel culverts along these roadways are now about 40 years old and likely won’t last as long as any new pavement. The culverts were added into the scope of work, increasing the bid considerably.
The east-west leg of Barnett Road also was added to the project despite it being in better shape than other city streets, according to Christianson.
Christianson proposed several financing mechanisms, recommending the council postpone action until next week.
One funding mechanism is Tax Incremental District 10, but this TID projects to have only the ability to cover $52,000 of additional work in its lifetime under current conditions. This could change if Indeck buys the city-owned building it now leases at 1506 Barnett Rd., putting the facility back on the tax rolls and adding more revenues to the TID.
“Right now we have no certainty of those things happening,” Christianson said.
A second funding mechanism is Mining Fund 290, which had a 2018 balance of $505,658.This fund had been almost totally exhausted until the Rusk County Board bought out the city’s remaining interest in the former Owens Corning Conwed building several years ago, returning about $400,000 to the fund.
A third funding mechanism is the Indeck lease of the 1506 Barnett Rd. property which will generate $275,832 over the next three years. However, a provision of this lease says Indeck could make property improvements in lieu of paying rent. The property is very flat around the building exterior that ice melt can back up under doorways, so it is very likely Indeck will regrade the land in an attempt to keep this water away.
A fourth funding mechanism is charging the road repaving cost to TID 10, knowing this will create a deficit. TID 10 might eventually be able to pay this off. Do not include the railroad crossings in the project at this time. Loan the entire amount needed from Mining Fund 290 initially to be replenished as possible from TID 10, subsidized by the Indeck rent.
Christianson told the council he expects the city auditor to report the city’s general fund balance has gotten precariously low, due in part to cash-flowing current street projects without borrowing.
“We have dipped very, very deeply into the general fund balance,” Christianson said.
The city is advised to keep its general fund balance at about 25 percent of its operating budget, but it is now less than 10 percent. In recent years it had soared to about 35 percent, but over time this money has been used for repairing streets, balancing budgets and other items.
“On this project with Barnett and Gustafson roads, we might also want to think relatively seriously about borrowing to cover that,” Christianson said.
Ald. Marty Reynolds said the city at this point is overextended with Worden, Fritz and other ongoing street projects.
“I don’t honestly see how we can even consider spending $470,000 to $500,000,” Reynolds said. “We have streets in the city that are constantly driven on that haven’t been fixed yet.”
“We can’t afford to go bankrupt trying to get everybody’s street done,” Reynolds said.
The city and town of Grant collaborated several years ago on Doughty Road improvements.
“If we have to borrow another $600,000 to finish the project that is being done right now, I don’t know where those dollars come from,” Reynolds said.
Ald. Bill Morgan asked why the whole project has to be done in one year. “Why can’t we come to the watertower and back around to the south, then next year do the other part. The worst part is by the mill,” he said.
Council members also expressed hope about the possibility of future street project funding through a recently announced Department of Transportation grant program.