Voters will be able to vote on Proposition Streets in the Municipal Election on April 2. The question as stated on the ballot: Shall Hermann, Missouri, issue its general obligation bonds in the amount of $8,100,000 for the purpose of repairing, extending and improving the streets in the City including curbs, gutters and sidewalks where determined necessary by the Board of Aldermen? “Yes” or “No”
Q – Recently, taxpayers have been asked to support tax increases only to find out that not all of the tax increase will go for the described purpose, I hope that is not the case with Proposition Streets?
A – No. 100% of the money raised by Proposition Streets will be used to repair Hermann Streets and curb and gutter, only where needed. No sidewalks will be constructed with this money.
Q – Is a simple majority enough to pass Proposition Streets?
A – No, a 4/7 vote will be required to pass Proposition Streets which translates to 57 percent voting “yes.”
Q – How were the street water line, tax and obligation bond schedule and priority street maps developed and where did the data come from?
A – The maps and charts were developed from previously gathered data, engineering data, information from vendors and suppliers and from the many years of personal experience gained on the job working on Hermann Streets.
Q – When will the city actually start repaving, if Proposition Streets passes?
A – Engineering and preparation work will begin as soon as the city has the first draw of money. Core samples and bid specifications must be developed and bids sought. Contracts will be awarded and work can begin. Seasonality will affect the startup but weather permitting some street repaving can occur within the first year.
Q – How will Proposition Streets be funded and what does that mean for the average Hermann taxpayer?
A – Proposition Streets will be funded by a property tax levy increase of 65 cents per $100 of assessed valuation which means the average Hermann home, valued at about $100,000, has an assessed value is $19,000, and a tax increase of $123.50 annually or less than 35 cents per day.
Q – Will the homeowner or the City be responsible for curb and gutter?
A – Curb and gutter, only where needed, will be paid for from the money provided by Proposition Streets.
Q – The ballot language says the bond issue is $8.1 million but the flyers only show a maximum of $1.6 million borrowed and owed (plus low interest) at any point. Please explain this . . .
A - Proposition Streets is different from the regular borrowing and payback plans. If it were a regular plan, $8.0 million would be borrowed on the front-end and repaid over 20 years, paying interest on the unpaid balance of $8.0 million at first. Under Proposition Streets we only borrow the amount we need for the next four years of street repairs and then pays it back before borrowing the amount needed for the next four years of street repairs and then paying it off. This process of borrowing, repaying and borrowing again, allows for continual, ongoing street improvements while keeping taxes and tax levies very low.
Q – Why did the City decide to do it this way?
A – Spreading the borrowing out saves a great deal of interest expense and allows Hermann to keep the tax levy very low.
Q – Shouldn’t we borrow all of the money at first and repair everything in a hurry?
A – Streets usually last a minimum of 20 to 25 years, if we fix them all at once most of them will be in need of repair soon after the bond issue sunsets. If we fix them in stages, some will be new and some will be old when the bond issue is paid off, but we won’t be back in the predicament we find ourselves in now where they all need replacing at once. Doing it this way, we believe, we can maintain the streets from that point on, within our normal budget.
Q – Do you think that if we borrowed all the money on the front-end it would even be possible to fix all the streets in the first four or five years?
A – No, although we will start with the streets that do not have any infrastructure problems under them, we have a large number of streets that have water and sewer underneath that must be fixed before we repave them. Fixing this infrastructure will take several years. The second limiting item is the logistical question of making sure that enough streets are open for traffic to move about in Hermann.