Sign delays infrastructure work

In News by Reporter News

A plan to run water and sewer infrastructure along the south side of Hwy 6 is facing a delay as the city negotiates with Clear Channel Communications regarding a large billboard sign that sets in the direct path of the installation. Negotiations have resulted in a preliminary agreement to have the sign removed but two points remain to be settled. In order to expedite an agreement, Clear Channel is pressing the city to amend its sign ordinance so that digital signs would be allowed within the city limits. City Council is opposed to that. Clear Channel also proposes that inaction on the sign ordinance within one year would mandate “just compensation” be paid to them. City Manager Kyle Jung says city staff is working on “what that number is. Once we get that we can bring it back for your (council’s) consideration.”

Mayor Delores Martin told council that “it is extremely important that we address this ASAP because it is holding up MEDC’s project on the south side.” She said promises were made to landowners along the path of the water and sewer lines that in exchange for easements on their property the installation would be completed in a timely manner. “They understand there is an issue but they want us to resolve it ASAP so we can go forward,” she said.

Infrastructure improvements on the south side of Hwy 6 will be paid by the Manvel Economic Development Corporation (MEDC). The estimated cost of the project is $229,000. The south project was considered and agreed to subsequent to the larger water and sewer installation currently in progress on the north side of Hwy 6 that will provide utility capacity to accommodate commercial/retail development. MEDC agreed to fund $1,600,000 toward that project with $1 million funded in cash and the remaining $600,000 to be paid in annual payments beginning in December 2015. The obligation will be repaid by December 2022.

According to the city’s consulting civil engineer, Dan Johnson, the sewer lines are installed on the north side and are undergoing testing. The water line installation, which will run parallel to the sewer line, is expected to start this week. Johnson says the project is anticipated to complete within the contract terms despite a large number of rain days the contractor has been faced with. It is expected the work will be done by early March.

It was hoped that work on the south side could commence upon completion of the north side as the contractor already has in place the equipment and materials to easily move across the road. If the installation is delayed the contractor will need to pull off that equipment and then restage once all the easement issues are resolved, adding time and expense to the project.

It appears doubtful that an agreement will be forthcoming soon enough to allow the contractor to continue the work uninterrupted. Clear Channel is holding a tough stance on the digital sign allowance while city council seems equally set to not allow such signs. Unless a reasonable dollar settlement can be negotiated, the city would likely look at condemning the sign through imminent domain. City attorney Bobby Gervais explained an imminent domain proceeding would require about 60 to 90-days.

Infrastructure improvements on the south side had originally seemed to be unattainable, at least in the near term, as a couple of landowners were steadfast in their opposition to negotiating with the city on the required easements that would enable the project to move forward. Perseverance on the part of the mayor and city staff eventually won out, however, which enabled the project to move forward with funding from the MEDC.

MEDC is charged with the promotion of economic development and attracting, retaining, and expanding businesses in Manvel. That effort can be achieved through various mechanisms, including direct investments in financing support and other economic incentives, and through contributions to transportation, utility, and other public infrastructure projects.

MEDC is currently funded through collection of 1/8 of 1% of local sales taxes. That is half the amount reserved upon its creation. In 2010 Manvel voters approved changing the allocation so that a greater percentage of the city’s sales tax revenues would be put toward road improvements. Most MEDC members were opposed to the change at that time with a general consensus that the funds would be better utilized with a longer term outlook. City Council, however, felt the immediate need of road work was more in keeping with the mood of the populace at that time and authorized a re-allocation that voters ultimately approved.

As state law requires the allocation to be re-affirmed by voters on a regular basis, city council will decide at its next council meeting whether to seek a reinstatement of the full 1/4 of 1% to MEDC or to maintain the current allocation of 1/8 to MEDC and 1/8 to the road fund. The sales tax allocation toward roads is in addition to the regular budgeted amounts that is receives. MEDC members suggest the city is in far better financial condition today than it was in 2010 when city revenues struggled to meet basic needs. Just last year the road department was able to acquire its own road building equipment at a cost of over $300,000. New developments are adding to the city’s property tax rolls each year and the city is in a far better financial position to maintain its roads to acceptable levels.

MEDC members are urging council to reinstate the full sales tax allocation and stress that funds can be used to promote long term economic development that citizens will get direct benefit from. The current water and sewer projects, when complete, will allow for commercial development that would not be possible without MEDC participation. Significant infrastructure needs remain for Manvel to be in position to attract the kinds of development it desires, such as a large grocery store. With full funding of the sales tax allocation restored, MEDC will be able to better contribute to those needs thereby easing the tax burden on city residents. Projects funded through MEDC allow the city to forego taking on debt that would in the end be repaid primarily through property tax collections.

Property taxes are a direct cost to property owners, while sales taxes are indirect as they are collected only on what is purchased within the city. Not only do city residents fund the sales tax but anyone from outside the community that spends money will contribute as well.

Should Council agree with MEDC and authorize an election that voters ultimately approve, the reinstatement of the full sales tax allocation would not result in a tax increase to citizens and the city would see no additional revenue. The vote would only change how the revenue is allocated once it is received.

Print Friendly, PDF & Email