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HomeMy WebLinkAbout1988 June Newsletter J!i%fi'/r% JiJ/ lr OFx 1 �i i City o� S in 5524 Upper 146th St.No.,Hugo,MN 550,38 CityProposes Capital Improvements As a result of the recent taxing limitations placed on the city by the Legislature and its affect on road maintenance, the Hugo City Council is embarking on an effort to provide a long term solution to the city's road problems. A capital improvement project is being considered and the city will be making a decision this summer on whether or not this effort has community support. The following is a list of anticipated questions with an- swers that we hope will provide the community with more information on this proposal. General Information HOW MANY OF THE CITY'S ROADS ARE BLACKTOPPED? Currently there are 58 miles of municipal road in the city of Hugo and only 8 miles of those roads have a bi- tuminous surface. WHAT BROUGHT ABOUT THE IDEA OF A CAPITAL IMPROVEMENT PROGRAM? In the summer of 1987 the Hugo City Council established a list of priorities to help improve the city of Hugo. Those priorities were as follows: 1. Establishment of a fiscal policy and municipal budget. 2. In- crease code enforcement and building inspection. 3. Prepare a surface water management plan for the city. 4. Improve the condition of municipal roads. 5. Set up a consistant planning process to deal with zoning and subdivision issues. WHAT CRITERIA WAS USED IN PRIORITIZING ROADS? 1. Cast to maintain the road. 2. Current road conditions 3. Trafflc volume on the roads. 4. Citizen complaints. 5. Community growth pattems. WHAT IS THE SCOPE OF THE PROJECT IN QUESTION? The overall capital improvements program endorsed by the city council calls for an expenditure of$2.2 mil- lion dollars over a 5 to 6 year period. The first phase of the project involving the streets in most need of up- grading and carrying the greatest volume of traffic will cost the city approximately $1,000,000. WHY MAKE THESE CAPITAL IMPROVEMENTS NOW? There are a combination of factors that make it extremely advantageous to the city to pursue this program at this time. Currently interest rates on financing this type of project are very favorable and the city has re- ceived very competitive bids from contractors on this type of work. If the city proceeds with financing of this project in the summer of 1988 it can be done with a very minimal tax levy increase to Hugo residents. The liklihood of all these factors being favorable after this year is not good. ARE ALL STREETS IN THE CITY OF HUGO INCLUDED IN THIS PLAN? Only north/south and east/west collector streets are a part of this plan. WHY HAVE ROADS SUDDENLY BECOME SUCH A HIGH PRIORITY FOR THE COUNCIL? In the spring of 1987 and again in 1988, city hall received several hundred phone calls from area residents inquiring when the city is going to do something about improving its roads. One need only drive these roads the spring and summer to experience the joys of gravel roads. COULDN'T WE BUY A FEW YEARS TIME BY JUST ADDING GRAVEL TO THE ROADS? YESI But once again, adding gravel to the roads Is a very short term'solution to a long term problem. The weekly maintenance of gravel roads is very costly and even if we could increase the maintenance schedule, we cannot eliminate the dust in the summer, mud in the spring and fall, and the washboarding effect during various times of year. City of Hugo Special Bulletin,July 1988 Page 2 WHY NOT JUST PUT MORE GRAVEL ON THE EXISTING ROADS? There are several considerations which make this alternative less desirable each year. The maintenance of gravel roads comes under the scope of street maintenance which must be funded through the general goven ment operating budget which is restricted by the tax levy limits. Capital improvements of the nature pro- posed can be funded through the sale of public improvement bonds and the debt retirement on these bonds Is not subject to the legislature's mandated tax levy limits. With the cost of street maintenance going up 2 to 3 times the rate-that cities may increase the tax levy, one doesn't have to be a mathematical genius to see that the frequency of road maintenance will have to decrease or we will have to flnd some other sources of revenue to maintain the gravel roads in the future. WILL IMPROVED ROADS CHANGE THE RURAL CHARACTER OF HUGO? It is very unlikely that road conditions w111 have any effect on the rural or urban nature of a community. One need only look at the rural areas of Wisconsin and other northern suburbs where roads are surfaced and they have a more rural atmosphere than the City of Hugo. Financial Information HOW WILL THIS PROJECT BE FINANCED? The proposed financing mechanism is through the sale of public improvement bonds. These bonds would be sold to the public and the loan to the city would be repaid over a 15 year period. WHAT WILL THIS PROJECT COST ME? Based on a $1,000,000 project financed over a 15 year period at 7-112% interest we are estimating a tax in- crease of about $15.00 per year per household. Those properties abutting on the roadway would pay an addi- tional 21% of the cost of the road improvement to be assessed and repaid by the property owner over a 15 year period. WHY DO PROPERTY OWNERS HAVE TO BE ASSESSED? Minnesota law requires that for the sale of this type of public improvement bonds a minimun of 20% of pro ject cost must be assessed to benefitting property owners. The city council has the latitude of assessint more than 20%but must assess a minimum of 21% to pursue this project. HOW WILL THE CITY FUND PHASE 1 OF THIS PROJECT? The annual funding sources for Phase I over a 15 year period is as follows: 1. $21,000 in assessments 2. $15,000 tax levy increase 3. $70,000 existing tax levy. WHAT WAS THE 1988 CITY ROAD MAINTENANCE BUDGET? The city anticipates spending approximately$120,000 on grading, $10,000 on materials, $20,000 on mq jor im- provement and other road repairs, and $21,000 on snowplowing in 1988. WILL THE CITY SAVE ON ROAD MAINTENANCE IF THE ROADS ARE BLACKTOPPED? Both gravel roads and blacktopped roads require maintenance. Over the long haul, the maintenance savings wil not be that great, however, the city will realize an immediate savings in grading existing gravel roads. Just the grading costs for the roads in phase -1 of this project runs the city approximately $22,000 annually. If the roads were blacktopped the grading cost could be eliminated although the city would still have to pro- vide other maintenance and plow these roads like any other road. WHY NOT INCREASE TAXES FOR ROAD MAINTENANCE? The Minnesota Legislature passed a law in 1987 requiring that all cities in the state of Minnesota be subject to tax levy limits (the City of Hugo was previously exempt from the levy limits). In 1988 the legislature ex- empted cities under 2,500 from tax levy limits while other cities must adhere to the 4% and 3% levy increas- es for the next 2 years. With the rapidly increasing costs of other city services it is unlikely that the city will be able to increase its road maintenance in the near future. WHAT IF I CAN'T AFFORD TO PAY MY SHARE OF THIS PROJECT NOW? We don't anticipate that $15.00 per household will create a mq jor hardship for most Hugo residents. Thosk who may be assessed 21% or more for the project improvement will be given an option to pay for their as- sessment over a 15 year period in annual installments. Those who will be faced with assessments should keep in mind that if these projects were to be done in a conventional manner, as are most other public im- provement projects, the assessments would be 4 to 5 times more than proposed. City of Hugo Special Bulletin,July 1988 Page 3 WHAT PERCENT OF THE CITY'S ROAD BUDGET IS FUNDED BY TAX LEVY? Approximately 70% of the dty's road budget is funded by tax levy which is currently restricted by the State of Minneso- ta. MEETING TIMES...ETC. AS A HUGO RESIDENT SHOULD I GET INVOLVED? If you care about your community and its image, Don't take it for tented that things will just happen because you think they are a good idea. if you have pride in your community and want it to be thought of as a desirea- ble place to live and raise a family, then certainly the community's image should be of importance to you. SHOULD I SUPPORT THIS PROJECT? That is an issue that each individual should consider very carefully. Even if the street you live on is not in phase -1 of the project there will very likely not be a phase-2 or phase-3 unless phase 1 is accomplished. The benefits of doing this project now are great and delaying this effort will only result in a considerable tax increase to taxpayers in the future. IF I SUPPORT THIS PROJECT IS THERE ANY NEED FOR ME TO ATTEND THE PUBLIC HEARING? The public hearing isn't designed just to hear the objections to the project, but to get a general feel from the public whether this is the direction the city should be headed in making long term improvements to its road- way system. HOW CAN I GET MORE QUESTIONS ANSWERED REGARDING THIS PROJECT? The city engineer and other staff members will be available for an informational meeting at the Lugo City Hall from 3:00 pm until 9:00 pm on Thursday, July 14, 1988. The purpose of this meeting is to discuss the technical aspects of this project only. Whether or not this project will proceed will be the topic of discus- sion at the July 21 public hearing. WHEN WILL THE CITY COUNCIL MAKE THE FINAL DECISION THIS PROPOSAL? To take advantage of the favorable financing and taxing options available to the city now, the final decision will have to be made by July 21, 1988, following the Public Hearing. WILL THERE BE A PUBLIC HEARING ON THIS PROJECT? Yes. The city council has set a public hearing date for July 21, 1988 at 7:00 pm at Hugo Elementary School, 14895 Francesca Ave. IF THE CITY COUNCIL HAS APPROVED THE CAPITAL IMPROVEMENTS PROGRAM, THEN WHY HOLD A PUBLIC HEARING? The council has only approved the program in concept. Proceeding with this project will depend greatly on community input and the outcome of the public hearing. WHAT STREETS ARE GOING TO BE INCLUDED IN PHASE 1 OF THIS PROJECT? 177th St. No., Harrow Ave., Oneka Lake Blvd., Hyde Ave., Homestead Ave. No., Goodview Ave. No., 130th St. No., Falcon Ave. WHAT STREETS WILL BE INCLUDED IN PHASE 2 OF THE PROJECT? Elmcrest Ave., 125th St., 132nd St., Ingersoll Ave. North, Homestead Avenue, 146th St. IF I CANNOT ATTEND THE JULY 21 PUBLIC HEARING OR JULY 14 INFORMATIONAL MEETING, HOW CAN I EXPRESS MY CONCERNS ABOUT THIS PRO- JECT? Write or call your local council representative to express your support or opposition to this project. The city council wants to hear from you and is desireous of making a decision that is in the best interest of the overall community. Occupant Hugo Roads Improvement Project