From 0 to $44.5 million, Part I

From the Sept. 15 North Coast News: Some people spend their retirement playing golf, others doing puzzles. After retiring early from his professional career, Don Williams got out his magnifying glass, the better to inspect the nooks and crannies of local government.
Williams has owned property in Ocean Shores for 10 years, and lived here for five.  Few people follow the facts and figures of local government, like he does. “As a resident and taxpayer of Ocean Shores, I want a well-run government with competent leadership, a government that makes good decisions and then follows through,” he explains. “So, I’ve attended City Council meetings and been involved in important issues that the City has.”
Of particular interest to him has been the Street Local Improvement District (LID) program.  “I started following it after attending a town hall meeting in November, 2005 where property owners asked questions about the poor conditions of the streets and discussed possible ways to repair and maintain the streets.  This interest led me to follow closely the many meetings and town halls that have occurred as the Street LID progressed.”
The North Coast News asked Williams to write a chronology on the project, to help people understand how it all happened. He tackled it, with the attention to detail you might like to have, in your local government:

LID 2007-01 CHRONOLOGY
Prepared By:  Donald S. Williams

The chronology that follows was prepared using published agendas and minutes from City Council meetings, financial analysis notes I obtained from City records and from my own notes taken while attending most of the City Council and Town Hall meetings referenced below.

Nov. 7, 2005.  City Manager David Weiser moderated a town hall meeting to receive public comments and to answer questions about street repairs, street maintenance and ways to fund both repairs and ongoing maintenance.  Public Works Director Ken Lanfear described his Pavement Management System which is a database of City roads that identifies traffic information, pavement conditions and other road parameters.  Finance Director Mike Folkers presented funding alternatives. There were extensive public comments.  The City Council directed Weiser to obtain answers to questions and bring them back to Council for review.

Feb. 28, 2006.  At this town hall meeting, the City Council discussed using a local improvement district (LID) to repair the roads versus using property taxes or other methods.  Lanfear said that repairs could be made in about three years using a LID and the cost per lot would be about $200 per year.  Following public comments, the Council directed that further discussions of a possible LID be placed on the next agenda.

March 13, 2006.  At this City Council meeting, Lanfear asked for direction to proceed with preliminary actions to restore all city streets to “reasonable riding and structural conditions” at an estimated cost of $23 Million.  Lanfear stated that ongoing maintenance would cost about $500,000 per year.  A motion to proceed with a LID was made and it passed unanimously (Council members:  Creighton, Johnson, Patrick, Vela and Veitz).

July 10, 2006.  Council approved spending $141,600 with Macaulay & Associates for a Phase 1 Project Feasibility Study.  The Phase 1 study was to be an in-depth assessment study to show that property values would increase more than the cost of the LID.  If feasibility was shown, a second and final study would be needed at a cost of about $206,800, for a total cost for Macaulay’s work of about $348,400.  (Note:  The second Macaulay study, completed in 2010, actually cost $329,230 and the total cost of both studies was $470,830, not the $348,400 discussed at this meeting.)  Lanfear explained that the cost of Macaulay’s analysis would be charged to the LID.  He also stated that the road work would begin in early or mid-spring 2007, the project would take about three years and the LID’s cost would be between $23 and $25 Million.

Author’s Note:  The Phase I study contract between the City and Macaulay & Associates was signed July 24, 2006 and Macaulay’s report with preliminary assessments for each parcel was released on Feb. 6, 2007.  The Macaulay report contained a “Pavement Management System” spreadsheet that divided the City into 315 street segments and listed for each segment the required repairs and the estimated cost.
A summary is as follows:

Total Special Benefit (city-wide)    $46,536,000.00  (From Macaulay report dated Feb. 6, 2007)

Cost of Repairs (Includes all work)    $28,194,115.22  (From Pavement Management Spreadsheet)
Financing Interest    $2,430,000.00
Engineering/Inspection    $870,000.00
Administration/Legal    $290,000.00
——————-
Total Cost Funded By LID:    $31,784,115.22

The LID project’s cost-to-benefit ratio is the project cost for each dollar of benefit received and it is calculated by dividing the two totals shown above.  The Macaulay report showed that the LID’s cost-to-benefit ratio as of February 2007 was 0.6830 which meant that for every dollar of benefit received only 68.3 cents would be spent.

Next week: The Williams LID chronology continues, with notes on the construction phase.