It’s budget time for Lakeland including discussion of funding the first high school in the City and securing new debt service.
What impact might that have on monies for the New Canada Road (NCR) project, a 20+year plan to realign the existing two-lane Canada Road?
City Engineer Emily Harrell was asked about the project and if the City is in jeopardy of losing money spent for the proposed road.
“Since the project is in the 20/23 TIP (2020-2023 Transportation Improvement Plan), the City is not in jeopardy of losing funding. The City will have to continue to show progress on the project to stay in good standing with the State and FHWA (Federal Highway Administration).”
City Manager Shane Horn noted the budget and any cuts are not a done deal. “The budget will be presented at the May and June meetings for approval, so all discussion regarding budget cuts is speculative at this point.”
A resolution dealing with due diligence on CON (Capital Outlay Note) financing for a possible Lakeland high school was approved in a 3-2 vote March 20th by the BOC (Board of Commissioners). Vice Mayor Josh Roman said he asked for the meeting to amend an existing resolution. The amended version, he said, would give better direction to City staff, to financial advisors and any other professionals helping the City to determine exactly what the tax rate might be to afford debt service for a high school for the City. He read eight parameters he wanted staff to use.
Among those eight was point #5 which stated, “Assume no reserves are used or needed at this time for the New Canada Road project. The BOC directs staff to withdraw our city application for funding and anticipates reapplying for the next round of applications which is believed to be 2023. The BOC will decide on financing options at that time assuming the application is approved.”
During that March meeting, Mayor Mike Cunningham responded to that point by saying the City stands to lose and repay $20 million from the State and will have to pay for it for five years before reapplying for the project.
Mrs. Harrell said, “Staff was not required to pull the application for funding from the 20/23 TIP. The funds for construction of New Canada will be available in the 20/23 TIP. If the City shows progress on the project, no repayment will be required.”
Mr. Horn said, “The list of parameters was first distributed at the March 20 meeting. I kept the Resolution generic because I did not have any guidance on what the assumptions would be. Number 5 was removed because it is a separate project that needs to be properly noticed and discussed on its own outside of the other parameters. The Vice Mayor and all BOC members were made aware of this.
“PFM (Public Financial Management) is completing due diligence and will be ready to present to the BOC at the end of April.”
From Mayor Cunningham: “The Staff’s comments are correct. “The project has not been pulled, and at this point we are not in jeopardy of losing the 20 Million in state funding.”
From Vice Mayor Roman: “Since the last meeting I’ve been informed that we won’t know about the grant until September so it will not be part of the School Note discussion. Also, if we are awarded the grant we will have until 2023 to start the road construction which gives us time to figure it out. I do not plan to bring back up NCR for a vote unless that changes.”
Mrs. Harrell said, “Since the project remains in the 20/23 TIP, the City will not lose the $20 million in funding. The construction funding is not proposed in the FY20 budget. I have proposed monies to complete the right of way certification and finalize the Texas Gas relocation and construction plans”.
She said, “The proposed FY21 budget includes $500,000 for New Canada Road and $750,000 for Repair and Maintenance of Roads. The New Canada Road monies will be used to finalize Right of Way and finalize design of Texas Gas relocation. The BOC has not suggested changes to the proposed budget to date.”
To date the total spent on New Canada Road is approximately $3.5 million: $2.8 million is federal and $700,000 is local (Lakeland), according to Mrs. Harrell.
The NCR project was planned for the City in the early 1990s and approved by the Shelby County Metropolitan Planning Organization Plan and the Tennessee Department of Transportation. Link to the project website: https://newcanadaroad.com/index.php
The new roadway is to realign the existing Canada Road between I-40 and U.S. Highway 70 as a four-lane divided street with landscaped islands and bike and pedestrian trails, about 2.3 miles in length.
The proposed City budget includes $500,000 for NCR. Mrs. Harrell said, “These expenses are to finalize the current phases and get us ready for the construction phase. The City is responsible for 20% which is $100,000.”
The NCR website shows a timeline with construction starting in 2020. “This could vary with the type of financing and the City’s budget. The construction may be delayed slightly, but must begin within the 20/23 TIP cycle.”
Also part of Vice Mayor Roman’s eight parameters was #3 which suggested a change to City Hall expenditures of -$700,000 which could come from the roads budget of City Hall operations.
About the roads budget monies, Mrs. Harrell said, “If the roads maintenance budget is reduced, it will reduce the amount of paving that will be bid during that budget year. The City will still be able to patch roads using City crews.
“If the roads budget is reduced by $700,000, the only impact will be roads maintenance which includes contracted paving projects, striping, contracted patching (large patches) and guardrail repair. The City crews will still be able to patch the roads in-house.”
