Bond issue stalls without paving plan
Published 5:30 pm Tuesday, December 6, 2022
- Generic meridian city hall
Plans to borrow up to $15 million for paving projects throughout the city of Meridian stalled Tuesday as resolutions to begin the bond process were removed from the city council agenda.
Council President Dwayne Davis, who asked the items be removed, said the council needed more information about how the bond funds would be spent before bringing it up for a vote.
“We can’t just give people money without a plan,” he said.
Davis said the city was receiving enough internet use tax funds, which were going to pay the debt service on the bond, to pave roads without borrowing money. Beginning in 2023, the city is anticipating use tax revenue of about $3 million annually.
“We have enough funding in our internet sales tax fund, just like our sales tax, to pave as we go,” he said. “We don’t have to get all this money.”
The City of Meridian, in 2021, paid for a paving index that factored in the conditions of roads, repairs and which treatments were needed to help ensure the city was putting paving funds to the best possible use.
In October 2021, Public Works Director David Hodge told the council the paving index showed maintaining the city’s current road conditions would cost $6.4 million per year. Repairing every road, he said, would cost about $64 million.
Before considering a new bond, Davis said he would like to see how the city was using the paving index to come up with which roads would be paved with any future funds.
Mayor Jimmie Smith previously told the council he wanted to issue $20 million in bonds, with $15 million for paving and infrastructure projects and $5 million for recreational improvements. Smith, however, has not said exactly which roads his administration plans to pave.
“We need to do due diligence of using or paving index to find out exactly which streets we need to pave versus just going out there and just paving anything,” he said. “So, long story short, no plan, no bond.”
Hodge said Tuesday his department had and continued to use the paving index to make informed decisions about which roads to pave.
While he wanted to see a plan before bringing the bond issue up for a vote, Davis said he personally opposed a bond issue in general. The city has already issued $12 million in paving bonds, with $6 million issued in 2020 and another $6 million in 2021. By the time the bonds are paid off, he said, it will be passed time to pave again.
“The life of paving is almost five years,” he said. “It’s taking us 10 years to pay that bond back, so by the time we get to that 10 years that pavement is going to be done, and it’ll have to be paved again.”
The $15 million bond called for a 20-year repayment term, double that of the previous bonds.
The City of Meridian is currently paying about $1.2 million on the first two paving bonds from the internet use tax.
Davis said he would like to see the remainder of the funds put toward paving projects without additional debt. Although his approach may take a little longer, he said he felt it was the best way forward.
“We need to thing about the citizens and business owners of Meridian,” he said.