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Leonard moves forward with $609K road project


Bonds, fed. grant to pay for Forest St. job



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January 12, 2011 - It's a big project with a big price tag, but Leonard Village President Mike McDonald feels it's worth it because it needs to be done and the municipality is getting a great deal.

"I think it will be a good thing in the long run," he said. "I think people will see the benefits."

Apparently, his fellow officials agreed with him as the village council Monday night voted 7-0 to issue Michigan Transportation Fund Bonds in an amount not to exceed $150,000 to help pay for the repaving and reconstruction of Forest St.

"To my knowledge, this is the first time the village has ever done anything like this," McDonald said.

With an estimated cost of $609,316, the project encompasses the entire one-mile stretch of Forest St. (known outside the village limits as Rochester Rd.), from just south of Addison Fire Station #1 all the way north to Gerst Rd.

"It's in a pretty degraded state," McDonald said. "According to the people that know these things, it's long overdue. There are some sections of the road that have over 12 inches of pavement on them and that's on top of a bad base."

McDonald stressed this project won't be just a simple resurfacing.

"We're looking at making substantial repairs to the base of the road," he said.

"The whole one mile will be repaved, however, portions of that will be torn all the way down to the base material," McDonald explained. "They're not tearing up the whole road for its entire length. We know where the unstable and bad parts of the road are that need to be removed and rebuilt."

In the areas where no base repairs are needed, at least 2 inches of road surface will be removed and covered with new pavement.

"We have a poor rating on the pavement condition in the village," McDonald said. "The road commission wants us to do the project in 2011, so that's our goal."

To cover the remainder of the project cost, Leonard will receive approximately $500,000 in federal grant money, which can only be used to pay for actual construction costs, nothing else.

"There's no way the village could ever undertake a project of this size without some type of assistance," McDonald said.

Despite all the federal dollars, the village must still bear the cost for the engineering work, testing, construction administration and inspection, bond costs and the 20 percent local match for the grant.

Hence, the need to issue bonds.

"The village would basically have to expend all of its available capital in order to take advantage of the grant," McDonald said. "Rather than do that and have nothing for contingency, we're going to attempt to borrow approximately $140,000 to $150,000."

"It's not a desirable position to be borrowing, but we've borrowed before to purchase equipment and we've always done quite well," he noted.

All in all, McDonald believes it's still a great deal.

"We will basically get a $600,000 job done for around $150,000 of local money," he said.

The plan is to have the bond debt paid off in 15 years, beginning in October 2011 and ending in October 2025.

The annual payments are scheduled to start at $5,000 this year, increase to $10,000 in 2014, then increase again to $15,000 in 2023 and remain at that amount until the payoff.

The idea is to start out with lower premiums now, then pay more as the economy hopefully improves over the years.

Annual payments would be made using extra monies the village normally carries over from one fiscal year to the next "so we don't have to raise taxes as we go forward with this," according to McDonald.

If for some reason the surplus monies aren't enough, the village can use the Act 51 money it receives from state-collected taxes for major and local streets.

CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.
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