Woodstock raising taxes to put $56M into funding road improvements

Woodstock homeowners will see the city’s portion of their property tax bills grow each of the next four years after elected officials this month voted to issue bonds to fund $56.6 million in local road improvements through 2031.

The move was made partly in response to the Woodstock City Council receiving more complaints about the state of municipal streets than any other subject, its members said.

There may be good reason for that.

The city’s overall Pavement Condition Index rating, a measure of the quality of road networks, has fallen to 48.5, with 40% of the city’s 120 miles of streets categorized as either “very poor” or “failed,” according to city staff.

“Assuming the street condition percentages are valid and based on these general estimates that approximately 48 miles require reconstruction, very generally speaking, it would appear that the minimum level of funding the city would require to greatly improve the street network condition currently ranges from $48 million to $96 million,” city staff said in a memo.

“For a variety of financial, budgetary, engineering, and construction reasons, this is unrealistic to accomplish in the short-term,” according to the memo.

The goal is to bring the rating back up to more than 70 in 10 years, City Manager Roscoe Stelford said, which would be a strong score and is possible to reach with the additional funding backed by the tax increases the council approved and the bonds set to be issued.

Homeowners will see the largest of the tax hikes for the road spending program next year, when the city will levy another $73.15 for every $200,000 in residential value on top of what Woodstock already was scheduled to receive under its previous tax rate.

City tax hikes in the years 2023 through 2025 will range between $42.02 and $45.60 on a $200,000 home, so the total increase is $226.19 for such a homeowner after the fourth year of the roads spending plan. That figure that will be included in tax bills for years to come until the city repays the debt used to better the roads.

Debt backed by the tax hike will provide $32.2 million for the city to put toward the road improvement program over the next decade, city staff said.

City staff also presented the council with options to spread the increases to property tax bills more evenly, so there would be increases each year through 2031.

Other financing plans considered for the 10-year period ending 2031 ranged from spending a low of almost $53 million to a high of $62.3 million, with the required debt ranging from $28.2 million at the low end and $37.5 million maximum.

Council members felt taking on more debt the city would have to pay back earlier in the bond program was the right move for taxpayers because it saved money in the long term and would fund the most road improvements per dollar spent, even if it means the city could see its ratings by credit rating agencies temporarily decline as a result.

The plan passed by the council will fund improvements for 229.27 lane miles, city staff projects. The next best option analyzed would have provided 224.49 lane miles of improvements but would have taken almost $2 million more in spending under the financial structure, according to a city staff memo.

“Maxing out our debt load is not as scary as we first thought,” council member Wendy Piersall said.

Paul Christensen, Woodstock’s assistant city manager and finance director, agreed.

“This will not scare off the market. They will understand what we are doing,” Christensen said. “It does not mean 100% we won’t see our rating go down. But that’s not as bad as it sounds in a sense. We are a highly rated entity, and if we went down a notch, we would still be a highly rated entity.”

Water and sewer rates will require annual increases ranging from 1% to 2% as part of the city’s capital spending plans for the next four years, as well, city officials said.

The 2022 street enhancement program will be bid by the city early next year and start by mid-May, as weather and industry conditions allow, the city said in a news release.