Seng proposes $75 million bond issue

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BY NATE JENKINS / Lincoln Journal Star

Mayor Coleen Seng used the annual, mayoral statement on the state of the city Monday to propose how it should be improved, mainly in regards to street construction.

In her official address before about 70 people, many of them city employees, Seng asked the City Council to place a $75 million bond issue for street construction before voters Sept. 14.

The request marked the first formal action on a recently released task force report that suggests several ways to fill a $135 million funding gap for streets over the next six years. The mayor will introduce a resolution for a September special election to the City Council on July 12.

Seng signaled her belief the bond issue will reach voters by initiating some early campaigning.

"We just have to catch up," she said in her four-page speech, about half of which was devoted to financing for streets and other infrastructure.

"I believe Lincolnites understand that. I am asking the people of Lincoln to vote yes on the bond issue to help jump-start the infrastructure program."

Seng added later it is important to conduct a special election instead of putting the bond issue on the November, general-election ballot because "it separates Lincoln's infrastructure discussion from the many other debates and issues that will occur in conjunction with the November election."

Lower interest rates should also be locked in quickly, she said, noting that each additional percent of interest would cost taxpayers $10million over the life of a 20-year bond.

Last year, the City Council acted on Seng's request to ditch a similar, $106 million bond for streets after she sensed it was too early to take it to voters. A group that had recommended it quickly gathered again and took a repackaged financing plan on a road trip through the city, meeting with about 700 residents.

A bond issue met overwhelming favor. The show of support, apparently, has buoyed Seng's hopes that the public understands and is willing to address the issue of streets' financing.

"They understand that doing nothing costs more and would probably harm the community's future," she said.

Besides the bond issue, Seng also trumpeted a task force conclusion that the county and city better coordinate the purchase of rights-of-way needed for streets that will eventually have to meet urban standards. The so-called RUTS (Rural-Urban Transportation Streets) plan also calls for rural streets to be configured with the expectation they will eventually be absorbed by the city.

That program, Seng said, could be complemented by another recommendation that a new taxing entity, or Joint Public Transportation Agency, be formed between city and county officials. A draft document outlining such an agency will be prepared to spur discussions.

While a transportation agency would have the authority to levy taxes countywide for street construction, Seng focused Monday on its ability to implement the RUTS program.

Seng made no mention of a per-gallon tax on gasoline retailers, which could be levied in the city or, through a transportation agency, throughout the county. A so-called worker tax on full-time employees that would help tap out-of-city residents for streets money also didn't make her recommendation list.

Seng was careful, however, not to rule out those and other options.

"The other options offer the latitude - to know what type of ongoing, permanent revenue source will be needed once we know the outcome of the bond vote."

Paying off debt incurred by a $75million bond issue would cost the owner of a $100,000 home more than $40 a year in increased property taxes.

That fact could become highlighted more before a possible September vote because of Seng's 2004-2005 proposed budget. It calls for the first hike in the city's portion of the property-tax rate in more than a decade, though the rate she proposes - 30.6 cents per $100 of assessed value - is about one cent less than what it was last fiscal year. The current rate is about 29 cents.

Even with the lower rate than what existed in fiscal year 2002-2003, however, many could end up paying more because their property is worth more.

Countywide revaluations increased the value of property by about 14 percent.

"I want you to know that before I considered adjusting the rate, I first cut the spending requests," Seng said. "But when the cuts had been made, I could see that in order to maintain the quality level of services that are popular with the residents of Lincoln - it was going to be necessary to restore a little of last summer's tax cut."

The prospect of a bond-issue vote where property taxes promise to be an issue, however, could increase the council's resolve not to accept a rate increase in the new budget.

"We have an added incentive to have a zero-percent change in the budget," said Councilman Ken Svoboda.

Reach Nate Jenkins at 473-7223 or njenkins@journalstar.com