Despite voting Thursday evening against roundabouts on Vine Street, Hays’ two newest city commissioners will now support the $13.2 million project after being outvoted 3-2.
“I support you. We got a big project on our hands now,” said Commissioner Michael Berges after the voting, addressing city staff and the three city commissioners who favored the North Vine Street Corridor project. “I’m here to support that project and see it through.”
“Yeah, absolutely,” said Commissioner Mason Ruder, who also voted against the project after bids came in more than $3.5 million over engineers’ estimates.
“I’m here 100% with it,” Ruder said after the vote.
Commissioner and Mayor Shaun Musil and Commissioner Sandy Jacobs have referenced several times in recent weeks the large volume of emails, phone calls, in-person and Facebook comments they’ve received from citizens both for and against the project, which will transform the north end of Vine Street.
“I appreciate the two newest commissioners,” Jacobs said of Berges and Mason, citing their research into the project before making their decisions.
“And thank you, our community,” she said. “Everyone who came forward and gave their opinion through this process, I respect each and every one. Thank you very much for doing that on both sides of the issue.”
“After tonight, I know lunch tomorrow won’t be pretty for some of us, and that’s part of it,” he said. “I don’t believe a one of us is doing this for fame or fortune, we’re doing it for our community. Whether we agree or disagree, we’re going to be professional about it.”
Commissioner Ron Mellick said the Kansas Department of Transportation’s estimate of $8.15 million, and engineering firm WSP’s estimate of $8.46 million, were each wrong because contractors know better the size of a job as complex as the North Vine Street Corridor project.
It will take 18 months to build, mainly the series of four two-lane roundabouts and other improvements to Vine Street from south of 32nd Street to north of 41st Street. The project runs 3,400 linear feet and includes reconstructing the west frontage road, as well as new pavement, curb and gutter, sidewalk, storm sewer, water mains, signage, pavement markings, street lighting and pedestrian signals.
“We were all disappointed, when the bids came in, that they were higher than what we expected,” Mellick said. “I don’t believe that engineers have a full grasp of what it takes to do that. They draw circles on paper and say go do it, but they don’t actually do the work. The two bidders that we had … they’ve both done roundabouts, and this is probably the most labor-intensive and complex, as far as roundabouts, that they’ve done. But they’ve also learned on their other roundabout projects what it takes to get it done.”
KDOT on March 25 announced Smoky Hill Construction, Salina, submitted the low bid of $11.91 million. On top of that, there’s $1.25 million in construction engineering costs.
Construction will start in May and finish the fall of 2021. Being Vine is also U.S. Highway 183, the project is officially KDOT’s, and the city reimburses costs.
Hays in 2019 won a Federal Highway Administration BUILD grant of $6 million to pay for most of its share. Now the city will have to kick-in $7.11 million.
The city will write KDOT a check from its Capital Projects Fund, then reimburse that with a general obligation bond. Transient guest tax proceeds from hotel stays will pay the debt service.
Despite voting against accepting the bid, Berges commented that there’s no tax savings from not taking the grant money.
“If we don’t accept a federal BUILD grant, somebody else will, so it doesn’t necessarily save tax dollars by us not getting it,” he said.
Despite that, Berges said the higher cost compounds the problem.
“I see it as basically being told we should take out a larger mortgage over a longer period of time for a house that is just too big for us,” he said, noting a $3 million problem is now a $5 million problem.
With the estimates, the city was looking at bonding $4 million over 15 years, with $900,000 in interest on the bond, he said, obligating Hays to pay $4.9 million.
Now Hays is looking at a $7.1 million bond over 25 years, Berges said.
“That is $2.9 million in interest, so the obligation Hays will pay on that bond is $9.9 million,” he said.
“I’ve come to the conclusion that the estimates we were working from were flat wrong,” he said. “The cost of this project is probably correct.”
Ruder suggested rejecting the bid, to see how business bounces back after the virus, or if there’s money in the federal CARES Act for the project.
“If we wait six months to rebid, I have no idea of what kind of bids we’ll get, if they’ll be higher or lower, or if we’ll get any bids,“ Mellick said. “Will this pandemic still be going on at that time? I don’t know. I don’t think anyone can say for sure.”
The city has bids in hand, and can afford the project, he said.
“I have to live for today, not wishing what’s going to happen in six months,” Mellick said. “So I feel like we need to get this construction started on this project.”
With 2% of the transient guest tax going toward the project, that’s an average of $360,000 a year, said City Manager Toby Dougherty. That doesn’t include the sales tax and guest tax proceeds from a planned travel plaza, retail stores, upscale RV park and hotel under construction at Exit 157 on Interstate 70. It’s unlikely all of that wouldn’t be enough, he said.
“I think you would have to have a lot of hotels shut down,” Dougherty said. “Because the current scenario doesn’t include the two new hotels that are under construction that are going to be a draw, and the development at 157, that is going to include hotels.”
Currently the city has $8 million outstanding in bonds, most of that for benefit districts where lot owners pay special assessments. Another $7 million will not hurt the city’s credit rating, he said.
“Cities in Kansas are limited statutorily to how much debt they can carry and it’s a ratio of your total assessed valuation. The city commission actually has a part of their comprehensive financial management policy that cuts that by half,” Dougherty said, “and right now we are significantly below that.”
He said the city commission has largely paid cash for its projects.
“In the grand scheme of things,” Dougherty said, “We have a very small amount of debt as a city.”
Musil noted that the project has been underway in various forms since 2013.
“I don’t think any of us are wrong, I think we have differing opinions,” Musil said after the vote, adding, “I know in my heart I’m doing what I think is best for my community.”
The owner of Paisley Pear Wine Bar & Bistro on Main Street, Musil commented on the community’s overwhelming support of local business during the virus, including donations to the reduced-cost school lunches supplied by Hays restaurants.
“It almost gives me goosebumps. Everybody in this community, there are so many people out of work, we all see all the negative of what’s going on. But people are going above and beyond to help kids, help families out,” he said. “I know there are people disappointed in the vote we had tonight, but my gosh I’m pretty darn proud to be part of this community.”
City commission meetings and work sessions on Thursday start at 6:30 p.m. Closed to public attendance by COVID-19, they can be viewed in real time on a livestream, or later, over the Internet at https://www.youtube.com/user/NexTechChannel.