North Riverside’s Board of Trustees on Oct. 19 gave the go ahead to begin exploring funding options for a $2.2 million street resurfacing program that would address about four miles of residential side streets identified as being in disrepair.
While trustees voted unanimously for the street project “to commence,” it’s not clear how the village plans to fund the work or when North Riverside might be able to obtain those funds.
Sue Scarpiniti, the village’s finance director, told the Landmark last week that the village is “exploring all options” for funding, but added that the village likely would not seek to issue any sort of debt until its bond rating improves.
“The first order of business is to get an improved bond rating,” Scarpiniti said.
In September, the rating service Moody’s reaffirmed its Baa1 rating with a negative outlook for the village of North Riverside. The rating signals to investors a medium-grade credit risk.
The negative outlook, with which Moody’s first labeled the village in 2014, means that the sale of any bonds or debt certificates will bear higher interest rates. The rating service maintained its negative outlook because of the village’s “outsized pension liabilities which will continue to pressure the village’s financial operations.”
However, Moody’s did state that the village’s bond rating could improve if it increased pension funding and maintained a balanced budget. The village in 2015 is meeting its full obligations to its police and fire pension funds.
Because of the negative outlook, North Riverside’s bond rating undergoes an automatic annual “surveillance review” by Moody’s in June.
As a result, said Scarpiniti, the earliest North Riverside might contemplate some sort of debt issuance would be after next summer’s review by Moody’s.
“At that time we hope to get the negative outlook removed,” said Scarpiniti, who added that if that happened, the village might be able to issue debt for the street improvement project in August or September of 2016.
North Riverside may also attempt to get a more favorable rating by seeking a rating from Standard and Poor’s.
But even if the village had the ability to issue debt, there’s no set plan on how that would get done at this point, said Scarpiniti.
The village could choose from a variety of options. It could seek to issue general obligation bonds, but those would require passing a referendum.
Or, the village could choose to issue alternate revenue bonds, which don’t require a referendum but do require a dedicated revenue source to repay the debt service on the bonds.
In the recent past, the village has chosen to issue debt certificates, which also don’t require a referendum but come at higher interest rates.
Alternately, the village could seek to institute special service areas, where taxes are levied on taxpayers in a certain area in order to pay for improvements.
But, officials haven’t decided on any one plan at this point.
“It all hinges on the kind of financing,” Scarpiniti said.
The road improvement proposal itself is ambitious and has the unanimous support of the village board.
At a meeting of the village board’s Streets, Sidewalks and Alleys Committee on Oct. 19, trustees agreed to support resurfacing roughly four miles of residential streets throughout the village.
Earlier this year, the village’s engineering firm, Frank Novotny & Associates, produced a street condition report, which rated each section of roadway in North Riverside.
The firm rated the worst streets “1” and the streets in the best condition at “5.” The survey identified 26 roadway sections as 1-rated streets.
On the east side of town the worst streets were identified as Traube Street, Northgate Avenue, Hainsworth Avenue north of the tracks and the 2200 blocks of Forest and Keystone.
On the south side of town, the worst streets were identified as 29th Court, Lincoln Avenue, the 3000 block of Groveland Avenue and Edgewater Road between Lincoln and Groveland.
On the west side of the village, the firm identified a variety of problem areas, typically in one- or two-block stretches including Forestview Drive from 9th to 13th; all of 14th Avenue; all of 15th Avenue; the 2200 blocks of 5th, 6th and 8th avenues; the 2300 blocks of 9th, 11th and 12th avenues; the 2400 blocks of 2nd and 5th avenues; and the 2500 blocks of 2nd, 3rd and 7th avenues.
Also rated at a 1 was 23rd Street between First and 2nd avenues, between 5th and 7th avenues and between 11th and 12th avenues, as well as 24th Street between 3rd and 4th avenues.
All of those streets would be resurfaced in the $2.2 million project. In addition, significant patching would be done to extend the life of eight other 2-rated sections of roadway.
“It’s the number one complaint this village has,” said Mayor Hubert Hermanek Jr. “Residents have been very, very patient. Now it’s time they get their streets done.”