Though they agreed last week to a third-party agreement, the Leavenworth County Commission decided on Monday to lend money for the paving of a subdivision road in the southern part of the county themselves.
Residents in the Lo-Mar and Stoner subdivisions petitioned to form a benefit district in order to finance the chip and seal of their streets after the county put the chip and seal of 166th Street in its regular road improvement plan.
Mike Spickelmier, director of county public works, told the commission last week that the idea was not completely new — under a policy adopted in 2001 subdivision residents with gravel roadways were given the option of paving their streets for the cost of materials only.
But the request from the Lo-Mar and Stoner residents combined that program with a benefit district in order to spread the costs out over a number of years.
To pave about one mile of road in Lo-Mar and Stoner is estimated to cost between $51,000 and $75,000, Spickelmier said. The residents of the subdivisions requested a 10-years financing mechanism in their petition for a benefit district, to be repaid through assessments. Spickelmier said the actual costs will be determined at the public apportionment hearing at a later date.
On Aug. 23, the commission discussed the matter after receiving offers from several area banks for financing.
Commerce Bank offered a five-year lease-purchase agreement financed through a bond that the residents would pay back and then, if necessary, another bond after that for the remaining balance. On Monday, Commissioner John Flower said since that decision was made the bank’s legal counsel had become concerned with the collateral being offered on the loan.
“Having a road as collateral is somewhat unusual,” County Counselor David Van Parys said.
Instead, the commission issued a board order under which Flower said the county will draw funds from reserve funds in its own 215 account. It was the second of two options that Flower said were on the table last week.
The amount will be paid back by the residents in the benefit district with interest, he said, as an assessment specific to those in the benefit district.
Van Parys said despite the fact that Commerce was reluctant to offer a loan, the company was very helpful in the process.
“The twist at the very end was in no way a sign of their lack of willingness to join in any future projects,” he said.
