The Jefferson City Council approved six projects last week that will be funded by the unassigned general fund balance and Sales Tax G.
About $704,000 from the unassigned general fund balance will pay for financial holes the Jefferson City Housing Authority could experience when condemning properties along East Capitol Avenue, the city's worker compensation shortfall and a dump truck.
More than $2.25 million in the Sales Tax G "Contingency/Economic Development" fund will pay for the remaining construction costs for Fire Station No. 2 and the downtown streetscape repair and electrical projects.
These were top priority projects on the more than $48.5 million capital projects list.
The City Council set aside $259,000 from the unassigned general fund balance to fund the first phase of potential financial gaps as the Jefferson City Housing Authority moves forward with condemning properties in the East Capitol Avenue urban renewal zone.
The Housing Authority is in the process of condemning three properties — 101, 103 and 105 Jackson St. After court-appointed commissioners assessed the values of the properties, the Housing Authority paid Cole County $153,000 for them. A hearing is set for 1:30 p.m. March 26. The city promised the Housing Authority it would "back fill and make whole" the Housing Authority for anything it can't recoup after selling the properties, if condemnation succeeds, City Counselor Ryan Moehlman said. This includes helping cover acquisition, litigation and expert fees, but does not take into consideration proceeds from the sales of those properties.
"We have to make a worst-case scenario that each of those three properties will be sold for $1 apiece and that we would have to back fill the entire outlay of the Housing Authority," Moehlman said. "Now, would that happen? I don't know. Each property is going to be different, and some properties could only elicit a $1 acquisition price but others would generate a whole lot more; but we have to have a dedicated funding source to provide the funding that we are obligated to give the Housing Authority."
The properties at 101 and 103 Jackson St. were appraised at $55,000 each, and 105 Jackson St. was appraised at $39,000.
"If you take $55,000 for acquisition plus another $25,000 for cost but (the Housing Authority) sells (101 or 103 Jackson St.) for $55,000, the city would be obligated for that $25,000. That's rough example math," Moehlman said. "To expect that the Housing Authority is going to get both appraised value for the properties plus enough money to cover their costs for every single property is unrealistic. So, for each property, the city needs to expect there will be some outlay at least for cost, if not for sales price deficiencies."
The city would not own these properties, though.
While phase one is nearly complete, Moehlman said, there is a chance for someone to challenge the decision and take it to the appellate court, extending the timeline.
Ward 2 Council member Rick Mihalevich originally wanted to lower the gap financing amount because it appeared to overestimate what the city would need, and instead add more money toward funding a second dump truck. However, Ward 3 Council member Erin Wiseman said she did not feel comfortable lowering the number and was worried the $259,000 might not be enough to cover the gap financing.
The capital projects list shows two gap financing phases, with the second phase for $500,000 for a possible six to eight property condemnations.
The council also approved $300,000 from the unassigned general fund balance for the city's workers' compensation self-funding reimbursement.
Jefferson City Finance Director Margie Mueller said the city has had a couple of large claim years, causing almost $16,000 deficit in the workers' compensation fund balance at the end of the 2017 fiscal year.
Since the city is self-insured, it must reserve a minimum of $200,000 in its workers' compensation fund balance. This means the council needed to put a minimum of about $216,000 in the worker's compensation fund to reverse the deficit and make the city compliant under state law, Mueller said.
"That, in my mind and in the leadership's mind, is fairly critical at this point," City Administrator Steve Crowell said Monday.
Crowell anticipates the city will receive some reimbursement but said he did not know when it would be received.
Ward 1 Council member Rick Prather said he did not understand why this item was on the capital projects list since the city must fund it to be compliant.
While Crowell anticipated a couple of items on the list — including the workers' compensation fund balance — would be discussed during the city's budget season, he said he wanted to provide a list containing all anticipated or possible expenses since they were looking at spending the unassigned fund balance.
The council approved funding to replace one dump truck for $145,000 with the unassigned general fund balance and said city staff would continue looking for ways to fund a second dump truck.
The capital projects list has the two dump trucks listed for $290,000.
Last month, city staff requested a supplemental appropriation to replace two dump trucks that were no longer street legal. The trucks contained cracks in the frames, and Public Works Director Matt Morasch said they had outlived their lifespans.
Morasch said city workers could operate without the two dump trucks, but projects might be slower.
Downtown streetscape sidewalk and street repair
The council approved $153,000 for the downtown streetscape repair project shortfall using funds from the Sales Tax G contingency fund.
The council set aside $640,000 for the project in November, which would repair the crosswalks, sidewalks and streets in portions along East High Street between Adams and Washington streets and in the 200 block of Madison Street.
The city paid $18,000 of the $640,000 for the electrical system engineering for the electrical project associated with the downtown streetscape project.
During last month's Public Works and Planning Committee, city staff told council members the street and sidewalk repair project would cost about $775,000 total — leaving a $153,000 deficit.
Morasch stressed the city needed to repair the streets and sidewalks due to safety and liability concerns.
"The crosswalks are a big problem. If you were to walk across them, you could about trip in the street," Morasch said.
The city last did this project in 2002, Morasch said. He anticipates another 16 years of use from this current downtown streetscape repair project.
Downtown street scape electrical project
Along with repairing streets and sidewalks, the council requested in November that city staff include event electric options in the project to encourage attractions like concerts and festivals.
The council approved about $350,000 of the Sales Tax G contingency funding to go toward the electric project, covering the range of funding alternatives.
City staff said during last month's Public Works and Planning Committee it would cost an additional $63,000-$157,000 to do electric work during the downtown streetscape repair project. This range depends on where the council wants to include the electric options.
The areas listed from highest priority are the stage segment area at the intersection of East High and Madison streets, the 200 block of High Street, the 100 block of High Street, the food court area in the 100 block of West High Street and the 200 block of Madison Street.
Morasch said this priority list is based on city staff recommendations and public comment. Residents and business owners downtown expressed the most interest in having electricity in the 100-200 blocks of East High Street, he added. To get electricity in that area, it also would have to be supplied from the stage segment section.
To add electricity to these three areas, which is the staff recommendation, would cost $310,000.
It would cost $275,000 to add electricity in the food court area and 200 block of Madison Street. Since the electricity is supplied from a different area, Morasch said, this could be done at a later time.
If the council wants this electrical option, Morasch said, it should be done at the same time as the downtown streetscape repair project.
"If you're going to do this, you need to do this before we fix the street and curbs and sidewalks," he said last week. "Otherwise, you could fix the curbs and sidewalks and streets, but if you come back in one, two or five years, you're just tearing everything back up that we just fixed that should have last 15 or 16 years."
Jefferson City Mayor Carrie Tergin, who owns Carrie's Hallmark Shop on East High Street, agreed the downtown streetscape repair and electrical projects should be done all at once to be cost-effective.
"As a downtown business owner, I see the need for what the project is and what council voted on. It is in close proximity to the Capitol for tourists, visitors and local people and (has) all of the events and shops," she said. "At the same time, as a business owner for many years, I would prefer to see it done right and would prefer to hold off when it could be done in its complete form."
Fire Station No. 2
The council set aside $938,102 from the Sales Tax G contingency funding to cover the remaining estimated construction cost for Fire Station No. 2.
Several council members and Tergin said funding the new fire station was the highest priority on the capital projects list.
Ward 5 Council member Mark Schreiber said not only has the city made a commitment to residents to construct a new fire station, it also has made a financial investment in it by purchasing the property at 3025 Robinson Road. The facility also needs to meet the fire department's needs, such as providing more space and appropriate accommodations for both male and female firefighters, he added.
Since other fire stations and the Hyde Park fire training facility soon will need repairs, Schreiber warned not to let the fire department's needs pile up.
"I think our first commitment has to be the new fire station, Fire Station No. 2," he said. "Can we really put a price on public safety? No, you can't."
Jefferson City Fire Department Chief Matt Schofield stressed this shortfall is an estimate and will change when they receive bids for the estimated $3.66 million new fire station. The timeline for when bids go out is still being finalized.
Once the Jefferson City Fire Department receives bids, Schofield will present those numbers to the council.
He anticipates the majority of the construction will be completed in 2018 with minor items to be completed in early 2019.
The 10,500-square-foot fire station would include 2.5 apparatus bays, bunk rooms, a mezzanine, training room, day room, gear storage room and classroom, among other features. The schematic plans also show an optional police substation and full apparatus bay.