City borrows $43 million for city streets

City Council

To combat the ever-pressing problem of deteriorating city streets and public facilities, Beaumont City Council members approved a sizable cash infusion Tuesday, June 25 — some $43 million in borrowed money.

According to the council agenda, most of the money will go to city street rehabilitation. Council approved $15 million for citywide street rehab and at least another $9 million on various South Park and Magnolia projects, among others. The rest of $43 million will be spent replacing or improving Beaumont’s public services facilities and riverfront, including the replacement of Fire Station No. 11 at a cost of $3 million, a new senior center to replace Best Years Senior Center at a cost of $4.5 million, and riverfront development and other improvements to the Neches at a cost of $5 million.

But the improvements come at a price — a price that would be even higher if Beaumont’s use of $47.8 million in royalties from oil and gas at the Municipal Airport hadn’t been approved.

City property taxes will have to be raised, according to the city’s financial advisor, some five cents to $0.69 per $100 in assessed value.

“The tax rate increase, if approved by the council later this summer, is directly related to the issuance of debt,” said City Manager Kyle Hayes.

With more debt comes more bills, but the city is listening to constituents and spending both the $47.8 million in oil money and the new $43 bond obligation mostly on improvements with direct benefit for the average resident whose $5 more a month in taxes will pay for the street rehab, Hayes said.

“The good thing about this money is once we receive the proceeds in August, we’re spending right now two and a half million dollars a year on residential street rehabilitation citywide,” Hayes said. “Under this plan, we’re going to spend seven and a half million a year. That’s what we need to do to make progress. Our street infrastructure is in fair condition, but we need to make significant progress.”

In other council news, city utilities director Hani Tohme presented to council a proposed rate increase on residents’ trash pickup. Tohme said the city of Beaumont has historically had the lowest rate for trash pickup, currently $15 per month, compared to almost every surrounding city.

For years, Beaumont’s landfill has helped to keep such costs down, but Tohme is asking council for a $1 per month increase in the fee, bringing resident’s monthly trash bill to $16.

The rate increase will help reduce the solid waste department’s expected $743,400 deficit for FY 2013 and help stabilize the solid waste fund, Tohme said.