The infrastructure levy is a proposed 15.76 mil property tax levy to fund the replacement and repair of much of the Village's existing infrastructure. Specifically, the levy would fund a $7 million bond issue to pay for the removal and replacement of our streets, curbs, and water lines (including the service lines, which are made of lead), and to make significant repairs and upgrades to our storm sewer system. The street base, water lines, and storm sewers are as old as the Village itself (1920s vintage), and the street surface and curbs date from the early 1980s. All are at, or near, or past the end of their expected useful life.
Municipal bonds are one of the most common ways for municipalities to borrow money for capital projects. The bonds have a maturity equivalent to the average (weighted) expected life of the improvements â€“ in this case 28 years â€“ with the interest rate determined partly by prevailing market rates and partly by the credit-worthiness of the issuer. Our bond counsel has estimated that our bonds will carry an interest rate of 4.25%. Because the Village doesn't have enough assets on hand to act as a security against the amount being borrowed, we need to pass a dedicated property tax levy for that purpose. The levy would remain in place until the bonds are paid off.
Using the formula described on page 2, a 15.76 mil levy would mean a tax increase of about $483 per $100,000 of assessed market value, or about $1,450 per year for a $300,000 home.
As many of you know, the Ohio Public Works Commission (OPWC) provides grants and zero-interest loans for local infrastructure improvements through its State Capital Improvement Program (SCIP). SCIP rules require that at least 20-30% of our project (the cost of the water lines) be financed through loans, and we can't apply for a loan unless we can show that we're able to service it. Having an infrastructure levy in place is therefore a necessary condition for us to apply for state funding.
If we're successful in obtaining state funds, as we hope, then we'll use the money to pay off the bonds early and roll back the infrastructure levy accordingly. There are no guarantees here, but we're committed to aggressively pursuing this option. We can keep applying for OPWC funding in consecutive years until we're successful.
If we had annexed to Worthington then the infrastructure repairs would have been funded through a special assessment on property owners in Riverlea. The cost would probably have been about the same. However an assessment is treated as an encumbrance on the property, meaning that if the property is sold the balance has to be paid off in full. This would have complicated home sales and potentially depressed property values. It's unlikely that Worthington would have pursued OPWC funding for a project of this nature.
Unlike the operating levy, failure of the infrastructure levy wouldn't lead to an immediate crisis. However our infrastructure isn't going to get any younger, and the cost of replacing it isn't going to get any cheaper. Several factors suggest that the sooner we pass a levy, the less it will cost:
Again, a public forum on the levies will be held in the Circle Park from 4:00-6:00 pm on Sunday, September 20. We hope that many of you will be able to attend. And please be sure to vote!