Boyne road gamble $200k short, for now

Funds may come available in next two years

BY BENJAMIN J. GOHS, NEWS EDITOR

Boyne City’s gamble on several hundred thousand dollars in grant moneys to rebuild Court Street will not pay off this season.

 

However, according to Boyne City officials, there is a good chance they will recoup the $200,000 in federal funds sometime over the next couple of years.

“Originally, when we started the Court Street project, we were supposed to have quite a bit of funding. The city’s liability would have been right around about $144,000,” said Boyne City Superintendent of Public Works Andy Kovolski. “We were notified in April there was a shortage of highway funds that were sent to the state—to all the states actually—so we ended up with a shortfall of $510,190.26, which we agreed to do what’s called an “advance construct” to cover those funds until more funds became available from the federal government to make up for that.”

The city was notified in August that the project had been awarded more funding but that a shortfall of $201,396 would still exist.

“An option we have is to ask the rural task force to reimburse … those funds either this road construction year or the year after,” said Kovolski. “It would be my recommendation that we go with the year after, as that would allow other projects that would allow other projects that have engineering been started, some have been awarded funding through other sources, to continue on and we would be able to ask for reimbursement in October of 2016.”

Boyne City Manager said the city has very good team effort working with the local road funding task force.

“We’ve gotten some significant projects where they’ve helped us with the state funding,” he said.

Cain added that he felt it would be short-sighted to demand the moneys immediately.

“We have the ability, right now, to sustain—as we’ve talked about with our audit—a financial hit,” he said. “We can carry that $200,000. We’re not gonna lose that much in interest on it, and I think it would benefit us in the long-term to maintain very good relationships in the task force for the next time we come up with a project they’ll remember how we worked together.”

Cain added, “I can’t tell you exactly how much we’ll have to take out of our fund balance to pay for that in the meantime until that money’s reimbursed.”

Boyne City and Evangeline Township are expected to pay $175,750 in total toward the estimated $889,912 project.
Federal “D” funds were expected in the amount of $7,987.
State “D” funds were expected in the amount of $3,175.
The bulk of the funding is supposed to come from federal highway funds at a total of $703,000.

Boyne City Mayor Ron Grunch expressed concern that Boyne City may experience some type of issue next year which necessitates those funds.

Cain said the city is financially solvent enough to absorb such an issue.

Boyne City Commissioner Delbert “Gene” Towne voiced support of asking the regional task force to move the project funding request to the next year in hopes that the funding will be available then.

“This, from my perspective, is a tricky one,” said Boyne City Commissioner Derek Gaylord. “Our responsibility is to the taxpayers of Boyne City and ensuring that we save the money we say we’re going to save or acquire the money that we say we’re going to acquire in the initial time-frame.”

Gaylord said he understood Cain’s point of view but said the other side of the issue is that Boyne City had a project ready to go that was inline for funding that simply did not arrive.

“We have already done that waiting,” Gaylord said, adding that he wasn’t sure which way to go on the matter.

Grunch said the big gamble already occurred and the amount at stake had been “whittled down.”

Boyne City Commissioner Laura Sansom said the city voted to take care of Court Street regardless of whether the funding was made available.

She asked if there was risk of losing the funding if the city were to wait another year to receive funding on the project.

“Waiting for it, as long as we’re OK financially, to do that, I don’t see any problem delaying the payoff,” Sansom said. “And, hopefully, it comes through.”

A motion to proceed with the delayed reimbursement was unanimously approved.

 

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