In a separate article in this month's edition of our web site, we presented a run-down of our Mayor and City Council's top goals for the coming year. I would like to say a few things about the goal that came in second place.

In that goal, the Council identified the need to create a street replacement program, including a way to finance it. 

That's a tough goal.

For some years, the Council has been looking for an alternative to our current practice of maintaining streets through the use of seal coating. As many of you know, seal coating is the process of taking an asphalt or a previously seal coated street and applying a thin layer of tar to it with rock chips. The chips are pressed into the tar.

The process helps to seal cracks that may have formed in previous years, and, hopefully, extends the life of the street before major reconstruction has to be done.

Probably the best example that I have heard as to why towns use seal coat was offered by Neil Morehead a few years ago when he was on the Council. He likened it to when people paint the exteriors of their homes when the previous paint wears off. As Neil observed, the paint isn't a substitute for a home's wood siding, but it protects it and extends its life.

Depending on the traffic on a given street and the street's previous condition, a layer of seal coat might last about 4 to 8 years before being redone.

But, there are problems to seal coating. While it might buy time for a street, it doesn't fix fundamental flaws that may have developed in the street. Also, as we've seen on streets like S Jones, layer after layer of seal coating can fill the street to the point that the curb is essentially gone.

And, as I mentioned above, while seal coating buys time for street, it is not an alternative to eventual street reconstruction.

In our current fiscal year, we are expected to receive $469,356 in Road Use Tax. That is a lot of money, but after we take from that funding that is also used to pay for public works personnel and departmental operating expenses ($127,000;) annual debt ($32,195) on the N Main Street storm sewer project of 1999; the capital improvement plan to replace equipment and provide partial funding of future projects on Western Ave, North Street, N Otto, and N Olive ($234,690;) and miscellaneous projects ($35,500;) that leaves only about $40,000 for other types of annual street maintenance work.

The $127,000 that is listed above is basically our use of Road Use Tax or RUT to balance our general fund's operating budget. We use this money as an alternative to raising property taxes for an equal amount. In previous years, we have used as much as $170,000 from RUT to balance our general fund budget.

Therefore, our use of RUT helps to keep our tax rate lower, but has the trade off of giving us that much less to use on our streets.

So, with only about $40,000 to use for street maintenance each year, all we can really afford to do is seal coat until we save up enough other RUT funds to do something more permanent. The problem is that we are not saving enough of our Road Use Tax funds at a fast pace to do anything on a wide enough scale before seal coating is no longer the answer on some streets.

Currently, we do not use special assessments for street projects. In the City Council minutes from the 1960's, there are numerous references to the use of special assessments for street projects. Personally, I'm not a big fan of assessments because, if they are seen as being too high on the abutting properties, people will fight having street projects done until their streets are in absolute tatters.

We also don't use property taxes for street projects.

For the last several years, we have used cash on hand, RUT, and tax-increment financing (or TIF) to finance street projects. Each has problems: Cash on hand eventually runs out and has to be replaced. Our RUT is stretched too thin. And, TIF only works on newer developments where there are new taxes to capture.

So, what could we do? Here's an example, but please remember: The ideas expressed below have not been presented to or approved by the City Council. Also, interest rates and the way that debt is amortized are variable. Also, the actual costs for projects may come in differently from the estimates that I'm about to use.

A few years ago, I asked IIW Engineering for some generalized figures about what it costs to reconstruct a street. I was told that, on the average, it cost $228.33 per lineal foot to reconstruct a 31' wide street with 6 inches of concrete on a 6-inch crushed stone base. The figure of $228.33 per foot includes the cost of engineering, but does not include the replacement cost of any underground utilities. (If street, water main, and sewer main replacements are needed the cost jumps to $341.00 per lineal foot.)

If we looked at projects in the form of 6-year timeframes of $1,000,000 apiece, we could reconstruct about 4380 feet of street every 6 years. At 4.5% interest, annual debt payments would average $202,000 per year. Within this, there would be principal payments that would average about $167,000 per year and interest payments that would average about $35,000 per year.

We could feasibly pay for each year's principal payment from RUT and have some money left over for seal coat or slurry to use on streets that are waiting for their turns for reconstruction.

We could then do one of the following with the interest costs:

a.) Assuming that a street project benefits that whole town and not just the abutting property, the cost of each year's interest payment could be paid for out of the general fund budget. In this scenario, annual interest costs average about $35,000 per year. If we used property taxes to pay for this, it would add about 31 cents per thousand dollars of assessed value to everyone's taxes.

b.) We could assess one-half and tax for one-half the cost of the interest. In other words, in this scenario, the total interest we'd owe would be about $213,827. If the project really involved about 4380 lineal feet, there'd be double that or about 8760 "running" feet because each street runs past property on both sides of it. $213,827 divided by 8760 equals about $24.41 per running foot. One half of that would be $12.20 per running foot. So, generally speaking, an 80-foot wide lot would be assessed $976.

The City's fiscal year of 2003-2004 could be significant for the City. During this time, we have about $470,000 in federal highway funds that are coming due for our use. The Council has already designated a project for these funds on Western Ave. A portion of these funds could also be used to fund repairs to E Summit Street on both sides of the bridge.

Federal money plus city funds could make for some significant improvements.

Around mid-December, I had a meeting scheduled with Pat Callahan, a former Maquoketa city manager who has since ascended to the higher heaven of professional municipal consulting.

Pat was dropping by to discuss the Mayor and City Council's annual goal-setting session that he would be facilitating later that night.

Our new receptionist, Sue, came to my office door.

"Brian, Dr. Bybee is here for your 11 o'clock appointment."

"What?" I asked.

"Dr. Bybee is here for your 11 o'clock appointment," she repeated.

"I don't have an appointment with him. But, Pat Callahan is suppose to be stopping by."

"Is that who that is? I think he looks like Dr. Bybee."

When Pat and I finished our meeting, we arranged a little scene. I followed Pat out of my office. We stopped by Sue's desk. Pat then turned to me and said:

"Now, remember to take those ear drops twice a day, then call me in a week."

We then looked and saw that Sue was watching and listening to us. She then caught on to what we were doing and said:

"Is this what you do all day…figure up ways to give the 'little people' a hard time?"

Actually, it isn't. It's only a side benefit.