HAMMOND — City officials are considering a swap with the state, taking on maintenance responsibility for two state roads in exchange for relief of a debt to the state.
An ordinance introduced to the City Council on Monday would authorize the mayor to enter into an agreement with the state Department of Transportation and Development to wipe out the $450,000 the city owes the state for an infrastructure project.
But the “savings” would be offset by city expenses in maintaining two state roads.
Mayor Mayson Foster told the council that the state is pursuing the Road Transfer Credits Program, which allows municipalities to assume responsibility for certain state roads within their jurisdictions in exchange for debts owed to DOTD.
Hammond has long been responsible for $490,276 the city was funded through the Relocation Assistance Fund, the mayor said.
The funds were used to extend water and sewer lines to the Winn-Dixie Distribution Facility on U.S. 190.
To satisfy that debt, Foster said, Hammond could agree to take over maintenance of North Cherry Street Extension and Church Street Extension. The state would award the city $328,000 in credits for the maintenance of Church Street and $121,000 for the assumption of the same responsibilities on North Cherry.
The mayor conceded that assuming maintenance responsibilities for the two roads would cost the city additional funds over the years, but in return the city would be relieved of the relocation assistance debt.
In another move to save money, the council gave preliminary approval for the city administration to refinance sales tax bonds if the market is favorable in the near future.
Grant Schlueter, a bonding attorney with Foley & Judell, LLP, said the city could refinance Series 2005 and Series 2006 sales tax bonds and possibly realize a savings of $100,000 a year for the remaining life of the bonds.
“At this time it seems ideal to renegotiate the bonds that are now outstanding,” Schlueter said.
He said permission to refinance the bonds must first be obtained from the State Bond Commission, and he is prepared to present the matter to the commission at its Dec. 18 meeting.
“If the market is right, we will be able to renegotiate the bonds in early January,” he said, “and if the market is not right, we just won’t pull the trigger.”