Aspen to borrow from itself to pay for street projects
Aspen is borrowing from itself to pay the costs of the city’s streets maintenance program over the next 15 years.
And for city officials, the best part is they are repaying themselves at a rate of 5.8 percent on the $3.9 million it will take to do the job.
The money will be used to both pay a private company to do roughly a third of the city’s street maintenance program, and to pay the costs of having city street department crews do the remainder of the work.
The program is a partial “privatization” scheme that was hatched by Streets Superintendent Jack Reid and the City Council in February, as a way to get the city’s streets into shape as quickly as possible.
And Reid told the council in February that, according to his research, the program will actually save the city money in the long run.
The council had planned to use a bond issue to pay the costs, but that plan was derailed recently when the Colorado Supreme Court said such a funding mechanism would require approval from the voters.
Tuesday, City Finance Director Tabatha Miller outlined a new funding scheme for the council, under which the city will borrow the money from its reserves, which reportedly stand at well over $11 million.
According to Miller’s outline, the money will be taken from the city’s day-care trust fund, general fund and Wheeler Opera House fund reserves, as well as from the city’s Asset Management Plan (AMP) reserves, over the course of the next two years. A total of $2.75 million will be used to pay for the Koch Materials Co. streets maintenance plans, and another $1.2 million is to be appropriated for work by city crews.
By the year 2010, according to Miller’s plan, the city will have repaid itself from AMP annual appropriations and additional AMP monies – in turn funded by tax revenues – to the tune of just over $5 million.
Mayor John Bennett, at a work session Tuesday night, noted that it is better for the city to be paying the interest to itself, rather than to an outside financing company or bank.
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