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Council likely to send $14M bond to South Portland voters

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Posted: Tuesday, April 2, 2013 6:01 pm | Updated: 6:07 pm, Tue Apr 2, 2013.

SOUTH PORTLAND – The South Portland City Council pulled the trigger on what it has long called its “top priority” – a new complex to combine public works, parks and transportation departments under one roof – agreeing at a special workshop session Monday to put the issue before voters in November.

The question is now expected to be on the agenda for the next regular council meeting, April 17, when a formal vote will put a $14 million bond question on the ballot.

“We’re pretty much at a drop-dead point for November or not,” said Mayor Tom Blake, as he urged councilors to rule on the project.

Proposed for a site off Highland Avenue, where the transfer station now sits, the project, now dubbed the public services complex, has produced sticker shock among some in the city for more than a year as its grown from a “ballpark” figure of $10 million to as high as $23 million.

The parks, public works and transportation departments are now housed in and around the city’s O’Neil Street complex. Recreation employees would stay at the community center. The city hopes to redevelop the O’Neil Street site, although there are concerns about cleanup there.

The most recent iteration of the plan, prepared by the city’s civil engineering firm, Sebago Technics, lops 23,500 square feet from the original 65,000-square-foot storage area, knocking total construction costs down to $16 million. Originally designed to house all 72 vehicles in the city fleet, the reduced area would allow space for only the salt trucks and buses currently kept under cover. Blake pointed out that the downsizing, far from being a concession made to win voter approval, could be a boon. Given recent talk of creating a regional bus service, it’s possible South Portland could find itself without a bus fleet of its own in the coming years, which could have left the city with an oversized building.

Councilors have already set aside $500,000 for the project, and Finance Director Greg L’Heureux said he expects that reserve fund to grow to $1.28 million before it’s tapped. That and a $715,000 grant the transportation department already has in hand would reduce the borrowing need to $14 million.

If voters approve the bond, a nine-month period of permitting and final design approval would put off bidding on the project by contractors to late 2014, said City Manager Jim Gailey. With site work to start in May 2015 and building construction set for mid-2016, when the first bonds would be issued, the complex would be ready for use by December 2016.

However, the first $700,000 payment would not be due until 2018, following a small interest layout in 2017. In that way, said L’Heureux, the first hit to taxpayers could be timed to the expiration of other debt – from retirement obligations and road paving – reducing the pain that might otherwise be felt. After all, L’Heureux noted, taxpayers already have the $41.5 million high school renovation bond to contend with. That bond starts coming due in earnest next year, adding 17 cents per $1,000 of property value to the tax rate.

“It’s unfortunate that we can’t move quicker,” said Councilor Patti Smith. “I feel like we’ve been talking about this and talking about this. It feels like to me like it’s time to move forward. We need to go.”

Of all the councilors, only Alan Livingston still expressed reservations regarding project costs Monday, although even he “fully supports the need.”

“I’m there, but I just want to make sure I’m there,” he said. “I can’t say yes tonight, but maybe next Monday I could.

“I just need to sleep on it,” said Livingston. “I’m in favor of a new facility, I just keep coming back to [wondering] if we’ve now become content with our debt increases – is that the level we are going to maintain now?”

According to L’Heureux, the tax rate would continue to climb based on borrowing for the high school renovation and the proposed public services complex through 2018, when debt alone, irrespective of other increases to school or city operating budgets, would make the tax rate 31 cents higher than it is today, before it starts to decline as debt is retired.

L’Heureux’s data predicts that by the time the proposed $14 million bond is paid off in 2038, at a total cost of $20 million with interest, the median home in South Portland will have paid $1,097 to support the project. The one real unknown at this time, said Gailey, is the potential costs to clean possible environmental hazards at the public works garage on O’Neil Street, six acres the the city would like to redevelop for residential use.

Given how South Portland had to go to the trough several times before voters passed the high school project, Councilor Mellissa Linscott fell closer to Livingston than Smith on the timing.

“I think this project is something we need to do as a city” she said, “but I am concerned about us setting ourselves up for it not getting passed.”

“There’s a time to save and there’s a time to spend,” said Smith, noting how little has been spent to maintain the complex now in use.

“This is probably the last building that we have to deal with in our city. This is the last piece,” she said.

However, Linscott observed there are plans afoot to consolidate middle schools, although Blake said that project is “at least a decade away.”

Still, for many councilors, the decision came down to one of safety at the public works garage, where some of the buildings date to the 1930s and the garage bays are not built to modern standards.

“I can be very conservative but I’m real big on safety,” said new Councilor Michael Pock. “If we have people working in unsafe conditions, we’ve got to make the step. It’s got to be done. We can’t be Chicken Little and worry about the sky falling all the time even though we have a middle school issue.”

“Putting it off one more year is one more year of putting the employees health at risk,” said Councilor Linda Cohen, who argued rising interest rates also make this the time to act.

“I hate to say this, but I think of those buildings as one welding spark away from a tragedy,” said Cohen.

Welcome to the discussion.