(This article is the second in a four-part series examining the state of the Kewanee streets; the scope of the problem; the cost of fixing them and the cost if we don’t. Mike Berry and Susan DeVilder contributed to this series.)
A sales tax increase that would allow the city to launch an aggressive road repair program will be on the ballot on March 19. In December of 2023, the city council approved the addition of the ballot question, which will ask voters to decide if they are willing to spend a little bit more at the registers in return for road repairs and upgrades.
At the December council meeting, City Manager Gary Bradley said the additional revenue could be used immediately to fix streets and sidewalks, and that the city could also pay for major street projects by issuing bonds and use the sales tax proceeds in later years to make the payments on those bonds.
That move would allow the work to be done sooner at a lower cost than if the city had to wait years to do the job.
A 2016 community survey cited street and sidewalk repairs as a top concern of local residents, but Bradley contends that proceeds from the state tax levied on fuel isn’t enough to repair the 200 lane-miles in Kewanee and cover the cost of the estimated $80 million to fix them.
The news of the proposed sales tax increase didn’t play out well for some residents, who have both questions and concerns about city officials’ ability to get the job done and say that another tax isn’t the answer.
Opponents of the tax increase have commented publicly with many citing the city’s need to balance its budget; spend less on police and fire vehicles and go after grants. They also point to the fuel tax already in place as proof that the city simply isn’t managing those funds or municipal funds well enough to warrant another tax hike.
City Manager Gary Bradley addressed many of the concerns and clarified some of the public’s misconceptions surrounding the issue. For starters, Bradley said that the city operates on a budget that is balanced.
“There is deficit spending for non-recurring expenses, such as capital expenditures,” he said, “but it comes from fund balances that already exist.”
The city’s budget operates much like a household that might save up money to remodel a bathroom or kitchen.
“We often have to save up small amounts of money until we have enough in place to complete a bigger project,” said Bradley.
If a project comes in under budget, then that savings is spent later to provide additional projects for their customers, he said. Similarly, revenues sometimes come in higher than expected during a particular year. Those surpluses provide services for residents, businesses and visitors to the community. The duty of a city government, Bradley said, isn’t to hold onto revenue, but to spend it on community needs.
A recent purchase by the city council of downtown Christmas lights sparked controversy with some residents who wondered why money was spent on such an extravagant purchase when the roads are in such poor condition.
Bradley said there are a lot of needs that are competing for sources and some needs have multiple sources of funding, while other needs don’t.
“I know when (the council) make choices, they believe in the benefit of those choices to the community,” he said, adding that Christmas lights can be utilized for years during the holidays, beautifies the city and provides residents and visitors with holiday cheer.
Another misconception about revenues used to fund road work is that the city already receives taxes from the Illinois gas tax and those funds should be adequate. But Bradley said until the 2020 budget, the motor fuel tax generated a little over $300,000, a drop in the bucket for fixing streets. Contrary to popular belief, the tax allocations aren’t based on how many miles of streets a local government has, but based strictly on the governmental unit’s population, Bradley said.
To complicate matters, when the state doubled the motor fuel tax, they put restrictions on what the incremental increase could be spent on, what requirements were in place and control letting of contracts. Bradley points to Lyle Street by Central School. That road is where the city allocated the funding, but while the city has fixed its portion, it still awaits the state to award the contract.
“The part that we have always gotten, the over $300,000 a year part, isn’t enough to do what we need done,” he said, adding that the Lyle project is augmented from the Non-Home Rule Sales Tax to be used for the Americans with Disabilities Act (ADA) compliance that is required when improving intersections of streets.
The rest of that sales tax was committed to make bond payments, and once those bonds are retired and the payments cease, the city can utilize those funds in the street improvement plan, he said.
Last year, The Kewanee Voice reported on a memo Bradley wrote to the council addressing the resurfacing of the intersection of Prospect and Grove streets. In the memo, Bradley wrote that when it comes to a complete street fixup, the cost for materials alone would be $7.8 million, not including the repairs needed to the water lines under those streets, and making sidewalks at intersections comply with the ADA and other repairs.
Bradley wrote, “Our system has far more needs than revenue with which to address those needs.”
Other critics of the additional sales tax point to grants as an option to fund road projects, a practice the city already pursues.
“We have been successful in obtaining grants, but we can’t count on external funding as a primary source for restoring our transportation network,” he said. “We apply for the grants that are available that help to meet a need in our community and sometimes getting those grants enables us to stretch our general fund dollars further so that we can get more done.”
Still other residents cite the city’s acquisition of police and fire vehicles as proof that the city isn’t prioritizing road repairs over other expenditures.
Bradley said it is true that public safety and transportation are often competing over the same budgetary resources, at least for a portion of what each spends on its operating costs.
“In general, an employee who works on streets is paid from the same pool of revenues as a police officer or firefighter,” said Bradley. “But each of those functional areas has its own specific sources of revenues, as well.”
The motor fuel tax can’t be spent on police officers, while the proceeds of a grant for a new fire truck can’t be spent on asphalt for filling potholes, he said.
“The most recent ambulance that we purchased was with grant funds, as were the fire truck that is being built right now; the project at Francis Park; the downtown improvements, and the demolition of dilapidated houses,” he said.
Last year, using $40,000 of a $200,000 Rural Violent Crime Reduction Initiative grant, the police department purchased a minivan used to transport clients of the KPD’s Drug and Alcohol Addiction Response Team (DAART).
Bradley said Kewanee is often successful at getting grants because as a community, Kewanee has more needs than resources.
“We recognize that in many cases, we reflect our community and vice versa. The vehicles we’ve bought aren’t flashy, but they aren’t run down, either. They’re well taken care of and dependable, and we believe they represent the people we serve every day in a positive manner.”
Bradley said if there was a grant for filling potholes, Kewanee would be the first in line. But there isn’t.
“We can’t afford to maintain the streets and replace streets at the same time,” said Bradley. “We need to get them to a point where they just need to be maintained.”
The sales tax increase, he said, would be a step in that direction.
