Lake Shore: Council agrees to $2.065 million bond sale to fund street projects
After no one spoke at a public hearing regarding issuing $2.065 million in property tax abatement bonds to finance 2020 street improvements, the Lake Shore City Council unanimously approved the bond sale Tuesday, May 26.
The council conducted the public hearing and its regular meeting online through Zoom.
Last month, the council accepted a bid from Anderson Brothers for $1,566,440 for the Port View Road West improvement project, along with improvements to Jacobs Road, Ebert Drive, Wienzel Point Road and Pamela Drive.
The council is scheduled to award the sale of bonds at its Monday, June 22, regular meeting. The general obligation tax abatement bonds will be issued for 15 years and applied to property taxes payable in 2021-2035. The property tax impact would range from a $31.40 proposed annual increase for a residential homestead with an estimated market value of $125,000 to a $198.20 proposed annual increase for a residential homestead with an estimated market value of $600,000.
Annual tax impact with the 15-year bond to a seasonal/recreation residential property valued at $100,000 would be a proposed $31.71; and to a seasonal/recreation residential property valued at $400,000 would be a proposed $126.85.
These numbers are based on taxes for new bonded debt only and do not include tax levies for other purposes.
The city’s Roads/Wastewater Committee unanimously recommended that the council proceed with bonding to fund the 2020 road projects. One factor to consider is the effect street improvements have on property values, the committee said in a memo. Studies have shown that when streets are improved, properties served by those improved streets increase in value, thereby increasing the city’s property tax base.
Another factor, as it applies to Wienzel Point Road, is that the street improvement will fix a longstanding environmental issue. Currently, the sewer lift station line freezes nearly every winter.
A final factor to consider is the current low bonding rate. The committee supported funding the projects now while project costs and bond rates are lower, rather than funding them later when project costs and bond rates likely will be higher.
Also, bonding allows the city to pay regularly for these improvements over the life of the bond versus a significant annual increase to the budget to fund them, the committee said.
“If the bond rates are low right now, the delay would have served us well,” Mayor Kevin Egan said, referring to residents voting in November 2018 not to allow the city to issue up to $1.595 million in general obligation bonds to pay for street reconstruction projects.
City Engineer Dave Reese, with Widseth engineering firm, outlined the street projects:
Port View Road West will be upgraded from gravel to pavement.
Jacobs Road will be completely reconstructed and widened for added traffic and the type of traffic it receives.
Pamela Drive will be repaved.
Wienzel Point Road will be resurfaced and the sanitary sewer corrections will be made.
Ebert Drive will be resurfaced.
Nancy Vogt may be reached at 218-855-5877 or firstname.lastname@example.org. Follow her on Facebook and on Twitter at www.twitter.com/@PEJ_Nancy.