Cost zooms for Fourth Ave. project

Hungry Horse News

Higher estimates for the Fourth Avenue water, sewer and streets project has prompted the city to reconsider two special improvement districts connected to the project.

The city budgeted about $767,000 for the entire project last year, but engineering estimates have come back at about $870,000, City Manager Bill Shaw said, leaving a shortfall of about $102,000.

"Costs have gone up about 30 percent," he said. "It's not just energy and materials. It looks more like supply and demand economics-contractors can ask for more money."

After considering three alternatives-abandoning the two SIDs, having the city absorb the additional costs, or amending and reissuing the SIDs-the Columbia Falls City Council approved two resolutions of intent to amend SIDs on a vote of 5-2.

Both Mayor Susan Nicosia and Councilwoman Jolie Fish voted against amending the SIDs without comment.

If the city picked up the $28,000 tab for the increased costs for the two SIDs, it could create a precedent and make it difficult to establish SIDs elsewhere in the city, Shaw said.

Property owners will have a 15-day protest period in which they can vote down the amended SIDs.

The council also told Shaw to seek financial assistance for residents who could not afford the SIDs. Shaw noted that some of the property owners have vacant lots that will increase in value from $5,000 to $30,000 with the improvements.

"Abandoning the SIDs would be a mistake," Shaw said. "But the main point is to connect the Clare Park well to the main water trunk on U.S. Highway 2."

Shaw said the Fourth Avenue project is too important to the city and will be done whatever the outcome of the two SIDs.

"It's a pretty good deal for property owners in the two SIDs," he said. "They can save money by having this work done at the same time the rest of the Fourth Avenue project is under way."

SID 34 would help pay for a water main for 10 lots on Fifth Avenue West and a sewer line in the alley between Fifth and Fourth avenues for another 22 lots.

The SID 34 contribution would be about $99,000, and the city would kick in about $66,000. The cost for the water main increased about 28 percent to about $4,910 per lot. The cost for the sewer main increased about 19 percent to $2,952 per lot.

SID 36 would extend water to eight lots south of 17th Street West near the junction of Talbott Road and Fourth Avenue West.

The SID 36 contribution would be about $35,000, and the city would pay about $53,000. The cost per lot increased about 36 percent to $4,430.

Property owners could pay off the SIDs in a lump sum or over a 20-year period.

Shaw said he was confident the city could secure about $460,000 from the state for the entire Fourth Avenue project. The city's total water and sewer debt is low now, he said, and water and sewer rates should not have to increase to cover the new loan. The 20-year loans from the state have a 4 3/4 percent interest.

Plant investment fees from homes south of Talbott Road could help pay for the project, Shaw said, but he advised against using sewer fees for work that only benefited neighborhood residents and not the entire city. The Fourth Avenue project involves water and streets only. The council agreed with Shaw.

City financial officer Sybil Noss said the city collected about $120,000 in plant investment fees last year.

Shaw said he will put the entire project out to bid even before the state approves the loans. The city will need to come up with about $377,000 this year, as revenue from the SIDs will not be available for a year. The city can also turn to its healthy cash reserves - which are 6 percent above the normal 20 percent.

SID 35, which would have assessed 27 lots along Fourth Avenue, was defeated by protest vote last June. Cost-saving measures were adopted afterward, including eliminating curbs and sidewalks and narrowing the avenue to 26 feet.

Shaw said the city will also have sufficient federal funding to pay for a bike path that will connect the Talbott Road bike path to the city pool and Pinewood Park. The bike path will run on the east side of Fourth Avenue.