Gladstone settles 9th Street finances
GLADSTONE — The financial contributions from the Downtown Development Authority and the city of Gladstone for the 9th Street Project’s engineering costs and bond payments were discussed and finalized Monday during a joint Gladstone City Commission and DDA special meeting.
Due to delays involving the project, the DDA was able to contribute more for the future bond payments and engineering costs by reallocating unspent funds dedicated to the project from previous fiscal year budgets.
The city also took a hard look at what each department could afford when it comes to the bond payments.
Renee Barron, zoning administrator for the city, explained a bond resolution was needed with not only the DDA commitment, but the city commission commitment to show Robert W. Baird Co., an American multi-national independent investment bank and financial services company based out of Milwaukee, that they have a means to pay for the $4.8 million 15-year capital improvement bond.
The 9th street project includes a total reconstruction of 9th Street — including work on storm drains, water lines and sewer lines from Minneapolis Avenue to 4th Avenue — as well as work on other streets, avenues and alleys. The work on 9th Street will also include work on some of the sidewalks and theaddition of a bike lane.
The 9th Street project will encompass parts of 9th Street, Delta North and South alleys, 6th Street, Superior Avenue, 11th Street, the alley between Minneapolis and Wisconsin avenues, 3rd Avenue, 8th Street, Superior Avenue, and the sanitary sewer on 4th Street.
The 9th Street project is within the Downtown Development Authority district, so the DDA will cover the costs of the majority of the project.
The start date for the $4.8 million infrastructure project was originally this spring, but was pushed back throughout the summer. It is now slated to begin in spring 2020, so the bond payments won’t begin until the 2020-2021 fiscal year.
The DDA and city had budgeted for the project in their 2018-2019 and 2019-2020 fiscal year budgets, but due to the delay $355,066 of the DDA funds weren’t used. The city also ended up having a $93,346 shortfall in its 2018-2019 fiscal year engineering costs payment.
During the meeting, various members of the DDA and city commission discussed how much more the DDA was willing to contribute to the project to help ease the contribution from the Department of Public Works, which was the department most concerned with its contribution for the lifetime of the bond payments.
Interim City Manager Eric Buckman explained they took a hard look at the various city departments and made new revenue sources estimates for the bond payments that included different contribution levels from the DDA.
After some lengthy discussion, the DDA decided to reallocated its $355,066 unspent bond payment funds to pay for some of the engineering costs and to contribute more to the 15-year bond payment.
DDA member Derby Chase made the motion to use the money set aside for the 9th Street project, which is $307,983 when the engineering costs are taken out, to be spread out to increase the DDA’s portion of the 15-year bond payments by $20,000. The motion was unanimously approved by the DDA.
The DDA will now contribute $227,000 to pay off the 15-year bond.
The DDA then unanimously approved the motion to use $47,083 of the $355,066 to help the city pay off the engineering costs.
After the DDA’s motions were approved, City Commissioner Brad Mantela motioned for the city to make the budget amendments necessary to cover the rest of the engineering costs by taking from the unspent bond payments dedicated from various city departments. The motion was unanimously approved.
The city commission then unanimously accepted the DDA’s proposal to reallocate its $355,066 for engineering costs and to increase its contribution to bond payments.
With the DDA now contributing $227,000 annually to the 15-year bond payments, the city commission was able to lock in the other revenue sources for the total $382,000 bond payment.
“I’ll make the motion that we allocate the revenue sources for the 9th Street project fund: the general fund of $25,000; the annual special assessment of $48,000; the major street fund of $29,400; the local street fund of $9,600; Wastewater fund of $25,000; water fund of $18,000; and the DDA of $227,000. So the total revenue is $382,000,” City Commissioner Darin Hunter said.
The motion was unanimously approved.