2012-07-13 / Front Page

City plans to delay public works garage

By Jack Flagler
Staff Writer

The South Portland City Council and city staff agree that a new public works facility is the number one priority among municipal facilities that need work. They say the current location on O’Neil Street is past its prime, is in a less-than-convenient location and needs to be replaced.

While there is a proposal on the table to build a new, more efficient facility off of Highland Avenue near the Wainwright Athletic Complex, it looks like that new facility will have to wait a year.

South Portland Finance Director Greg L’Heureux recommended at a workshop Monday, July 9 that the council delay sending the public works bond to a referendum until November 2012 to avoid a significant tax rate increase for South Portland residents.

The total cost of the public works bond is estimated at around $16 million to $17 million, said City Manager Jim Gailey, an increase from the previous figure of $10 million discussed when the facility was first proposed in May.

That cost, coupled with the ongoing $40 million high school renovation project, would have hit residents with significant tax increases over the next three years that L’Heureux called “a pretty substantial burden.”

“It’s going to be a tough sell with all this existing debt we have on the books,” L’Heureux said.

Starting in 2016, the city will begin to retire some of that debt it has accumulated, which L’Heureux said will make “positive impacts to the budget.” L’Heureux suggested delaying the public works referendum until next year to take advantage of that window of time.

By delaying the project, L’Heureux said the city will not only cut $1 million off the price tag of the bond, but also spread out the impact to ease the burden of city taxpayers.

“It becomes more palatable to the voters and citizens. The tax rate increases aren’t these whopping increases, it comes to a much more responsible rate increase that taxpayers can essentially live with in all respects,” L’Heureux said.

He added if councilors decide to set aside money in advance of the referendum, they will show voters they are serious about finding a fiscally responsible way to update the public works facility.

“There’s been so much talk about this November, but the staff doesn’t feel this is the right year,” Gailey said. “November of 2013 is a more financially prudent way to go. It provides less impact to the city of South Portland, and still gets our facility that is a great need, we just need to wait an extra year.”

Gailey added a 2013 referendum is “in the best interest of the municipality and the citizens out there.”

The city council seemed to unanimously agree with L’Heureux and Gailey’s assessment of the project. While Councilor Maxine Beecher called the delay of the project a “terrible disappointment,” she said it “makes sense financially” to put it off.

Councilor Rosemarie De Angelis said after L’Heureux’s presentation that South Portland is not ready for a new public works facility this year.

“We have to consider the needs of the city while we also consider the needs of the school department,” De Angelis said. “We have to balance those things, and I support both of them.”

“I must say I was elated because for months now I was thinking we’re not ready for this,” said Councilor Tom Blake.

Blake said the council needs to focus on how to market the new project to the voters, and the added time will not only lessen the financial impact of the project, but give the council more time to come up with that marketing plan.

The plan to delay the project does not come without potential risks. Chief among them is the declining state of the current facility on O’Neil Street. Gailey said at a workshop in May that the building does not provide workers with the resources they need to do their jobs effectively.

“It’s a struggle for them day in and day out,” he said.

“Our facility is pretty bad,” L’Heureux said, adding if the referendum goes to voters in November 2013, work won’t reasonably start on the new facility until mid-to-late 2014.

The other danger of waiting a year, L’Heureux said, is the possibility that the city won’t be able to take advantage of historically low interest rates that have been in place because of the slow economy. Should the economy turn around, those interest rates may rise and, in turn, raise the amount of debt the city takes on.

But Councilor Gerard Jalbert said there is no definitive proof interest rates will significantly increase anytime soon. Councilor Tom Coward added, “I’ll take the risk of slightly increasing interest rates, which may or may not happen.”

Ultimately, the staff and city agreed that the most responsible approach would be to wait a year on the referendum. Gailey stressed the need for “good financial planning.”

“That’s the message of this evening,” Gailey said. “It’s in the best interest of the municipality and the citizens out there.”

Staff Writer Jack Flagler can be reached at 282-4337, ext. 219.

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