Oswego weighs how to pay to move water main : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
|Oswego weighs how to pay to move water main|
|State to seek contractor bids for Route 71 widening this fall, board told |
|by John Etheredge|
The Illinois Department of Transportation (IDOT) has notified the Village of Oswego that it expects to seek contractor bids this fall for the long-planned widening of Ill. Route 71 to five lanes between U.S. Route 34 and Orchard/Minkler Road.
Jerry Weaver, the village's director of public works, said IDOT officials plan to award a contract for the project in November, which would allow construction to start next spring.
But before construction on the highway can start, the village must remove one of its water mains from the highway's right-of-way.
Weaver said the water main is located on the east side of the highway and extends from near the Route 34 intersection to Paradise Parkway.
Weaver said he believes the water main was installed in the state-owned right-of-way in the 1950s, at a time when the village had fewer than 2,000 people and the need to widen Route 71 to four lanes was not anticipated.
The village's engineering consultants have estimated the cost to relocate the main outside the highway right-of-way at $3.7 million.
In a memo, Mark Horton, the village's finance director, identified four potential funding options for the village to pay for the water main relocation project. The village board discussed the memo during a committee meeting Tuesday evening.
The funding options are:
_Issue $6.5 million in general obligation bond, which could be structured to reach maturity over a 15-20 year period. To cover the debt service, Horton suggested the village's water rates could be increased.
_Increase water usage rates or add a flat fee to village water accounts.
_Institute a new tax or fee dedicated to paying annual debt service for the project.
_"Pay-as-you-go" using the village's fund reserves. "This would require a plan to replenish the reserves to today's levels over a short time because of existing outstanding debt covenants," Horton noted.
Horton also suggested the board could consider including two other water system improvement projects as part of the financing of the water main project.
The additional projects would be the re-painting of the 15 year-old water tower in the village's Ogden Falls Subdivision and a water main section along Route 71 between Paradise Parkway and Orchard/Minkler road.
Horton noted the cost to re-paint the Ogden Falls water tower has been estimated at $850,000, while the Paradise Parkway water main project would cost approximately $2.5 million.
Weaver said the proposed Paradise Parkway water main would connect sections of the village's water main located on either side of the Fox River near the Orchard Road bridge.
"We would actually suspend a water main under the Orchard Road bridge and then tie-it back in with the water main that serves Arbor (Gate) subdivision (off Route 71)," Weaver said, adding, "What that would do is give us an additional river crossing for better water quality and more fire suppression."
As the now vacant properties develop along Minkler Road south of Route 71, Weaver said it "will become crucial for us to have that additional loop."
Referring to the Ogden Falls water tower work, Weaver said, "That tower was built in 1987 and it's still on its original paint. What I'm proposing to do would be to have a separate engineering firm come in and do an inspection and give us a detailed list of what additional maintenance items need to be done on that tank."
Weaver noted that the board may now want to consider selling bonds to finance the Paradise Parkway and Ogden Falls projects to take advantage of low interest rates.
In his memo, Horton wrote, "Should the improvement projects be for only the water main relocation...or should we give the go ahead and add in the Paradise Parkway Loop and Ogden (Falls) water tower refurbishing? There is not a right or wrong answer to this question unless you know exactly where borrowing costs are today and where they will be tomorrow. If you believe borrowing costs will remain at all-time historic lows, then there is no need to get the funding now to complete the three listed improvements. If you believe borrowing costs will increase during the next two years, then getting the funding now at lower costs make a lot of sense."
Horton noted that the total estimated price tag for all three projects is just over $7 million. However, the village has secured a $500,000 state grant to help defray the cost for the Route 71 water main project, which reduces its total cost from $3.7 million to $3.2 million.
"If borrowing is determined as the best means to pay for these improvements, then borrowing costs are at all-time lows today," Horton noted.
During Tuesday's meeting, board members discussed the various funding options, but did not reach a consensus on a funding plan.
Absent from Tuesday's meeting were board members Tony Giles and Jeff Lawson.
Board members did instruct village staff to obtain additional information on the funding options, including the possibility of utilizing revenues the village now rebates to the owners of the Oswego Commons shopping center under terms of a sales tax rebate agreement. The agreement expired in December.
Village President Brian LeClercq said the board would resume discussions on the water main funding as they review the village's proposed new 2012-13 fiscal year budget during meetings later this month and in April.