“It is a good time to borrow money,” Rick Smith, President of the Municipal Finance Services and Financial Advisor for Duncan’s proposed street project said.
Duncan is one step closer to smoother streets after a unanimous decision made by the Duncan City Council Tuesday to accept a resolution that authorizes a May 14 election by the people to vote on a $9 million general obligation bond.
If approved on May 14 by the people, the funds would go toward making repairs on 250 of Duncan’s streets. The bond will be repaid over the next 10 years using money collected from an additional property tax to property owners.
“If the term is too short, we were concerned about the debt burden,” Allan Brooks of Public Finance Law Group and member of the bond council said. “If the term was too long, we did not want to do street improvements that would be worn out before the debt was paid off.”
Smith and his staff have done research on Duncan’s housing market over the past 10 years. He said last year homes were valued at 5 percent higher than in the previous year. He is predicting a 2 percent growth over the next 10 years.
“Based upon the 2 percent growth predicted over the next 10 years, the actual ad valorem tax necessary to repay these bonds for a $100,000 house, for example, would be a little over $6 a month on average,” Smith said. “It will be a little higher in the first few years and a little lower the last few years.”
Smith went on to say that with the historically low interest rates, it is a great time for the city to pursue these bonds.
“We are in a favorable interest rate market,” Smith said. “There is no question about that. We do expect that to continue barring any unforeseen national, economic activity. It is a good time to borrow money. There is no doubt about that.”
The bond requires a simple majority vote by the people in order to be passed.
Although city staff is only required to disclose 70 percent of the project details to the public according to the rules of the bond, the city has chosen to disclose 100 percent.
“We did have some discussions about the number of items to be shown on this resolution,” City Manager Jim Frieda said. “Basically, the requirement is 70 percent. The reason we decided to put 100 percent of the items to be covered under this bond issue in this resolution is, quite candidly, to give the voters the opportunity to see the streets they are interested in, are being covered. If we were to leave 30 percent off, we would still complete the 100 percent we had prioritized but it would not give the voting public the opportunity to see all the streets that we are going to touch.
To raise awareness among Duncan residents about this issues, Public Works Director Scott Vaughn and Frieda have been visiting local civic organizations and explaining the details behind this project.
The council also approved the purchase of $13,337 in dive equipment from Mike’s Dive Shop for the Duncan Police Department’s Dive Team. The eight members of the team, which is part of the department’s Search and Rescue Team, completed over 100 hours of training in summer 2012.
The team used equipment either provided by the individual team members or that was on loan from an area dive shop. Duncan Police Department’s Officer Christopher Perkins said this dive shop no longer exists making it necessary for the department to purchase these items in order to be able to function. The approved purchase will be bought using recovery funds awarded to the department by the Drug Enforcement Agency.
In other business, the council approved:
The necessary parts, repairs and maintenance to fire department apparatuses for a total amount of $25,113.68.
WW Builders’ pay request for $119,328.63 for the Waterline Improvements 2012 Osage Road Project.
The pay request to Checka Group for $38,000 for the library broiler project.
Payment to Main Street Duncan for $1,810 as matching funds.
Approved the amendment of city codes to include provisions for water rationing and penalties for not adhering to any water rationing mandates.
All four of the dilapidated structures brought before the city council were awarded with extra time to complete the proposed repairs. The properties will be reevaluated at the end of their respective amounts of awarded time.