Twenty-two years ago, the city of East Grand Forks replaced several roads after they were damaged by the 1997 flood. Today, those roads are deteriorating, and city officials say that within the next decade or two, they'll need to find a way to special assess the costs of reconstruction.
The city currently special assesses residents 100 percent for the roads abutting their properties, including the cost of construction and ongoing maintenance. On Tuesday, city staff proposed a change to the special assessment policy to address upcoming reconstruction needs.
City Administrator David Murphy listed three streets that in 10 years will have the most need: 11th Avenue Northeast from U.S. Highway 2 to 10th Street Northeast; 20th Street Northwest from Fifth Avenue Northwest to Eighth Avenue Northwest; and Fifth Avenue Northwest from 20th Street Northwest to Garden Court.
Murphy recommended the City Council consider two options to cover a city share, with residents paying anywhere from a 30 to 50 percent share themselves.
One option, according to Murphy, would be for the city to put aside some of its property taxes every year into a capital improvement fund. The second option would be to borrow money from the state for the project, and to levy property taxes accordingly for the next seven to 10 years to pay off that debt.
"We could not find any real magic funding source that was available to us, other than levying our taxpayers as a whole," said Murphy.
Council member Marc DeMers said he prefers the city consider projects more than 10 years ahead.
"If we don't do something, our roads are going to deteriorate," DeMers said. "Or, we'll maintain them and the price will be so much more because we'll have gone through litigation, on top of construction, and we'll pay for it anyway because we'll lose litigation."
The litigation would be if residents refuse to pay their special assessments.
If the city can't find an affordable way to cover its share of special assessed projects, that could lead to soaring property tax increases in the future. Although levy increases were rather mild for this year-the council approved a 5.5 percent increase to the levy in December-just three years ago the city passed a 25 percent increase to cover expenses leaders said they had been putting off for years.
A 'matter of fairness'
Mayor Steve Gander agreed the city needs to decide how it will pay for reconstruction before it gets to be too late, but he said some residents might see a citywide tax increase to help cover a city share as unfair.
"You have new families in new subdivisions, sitting on $60,000 or $70,000 in special (assessments), and paying a lot of money every year," Gander said. "The delicate balance that we're trying to strike is what's fair to the residents on the street that needs to replaced, to those that have maybe paid their specials and (their street) doesn't need to be replaced, and to those who have just moved in and have that $60,000 to $70,000 debt to pay over the years?"
DeMers said changes to the special assessment policy will be a tough sell, but it's necessary to maintain a network of roads for all residents and to avoid larger citywide costs in the future.
"Just like our sewer system, our water system, our storm system, the part in front of your house doesn't matter unless every other part is there. We're building a network," DeMers said. "If the road in front of my house is fine but every other road in my neighborhood is shot, pretty soon I'm going to be stuck in my house."