Johns Creek's crumbling road system, in the cross hairs of a surging commuter population, will crumble more if the city doesn't do something soon, a recent study has concluded.
The city must spend $3.8 million annually over the next 10 years to bring its 250 miles of blacktop up to a minimum standard recommended by the Georgia DOT, a report released this week by Stantec Consulting Services of Duluth says.
That's money the city doesn't have. Nor can it get it by raising taxes or floating a bond because Johns Creek has an iron-clad cap that makes it virtually impossible to raise property tax rates. Bonding companies tend to steer clear of cities that can't raise taxes.
This pavement purgatory hits close to home for the 76,000 residents of Johns Creek. Stantec's study showed that while most of the city's main thoroughfares, such as Medlock Bridge and McGinnis Ferry roads, are in decent condition, local streets are falling into disrepair.
In its five years of existence, Johns Creek has never spent more than $1.15 million a year for road maintenance. That includes local and state money.
Each day, more commuters from burgeoning Forsyth County cross through the city on Medlock Bridge Road to points south and back. Traffic is up about 20 percent, to about 43,000 vehicles a day, since the road was widened to four lanes north of Johns Creek a year ago. Recent improvements to McGinnis Ferry Road have drawn similar percentage increases.
"We have picked up a phenomenal amount of additional traffic," Mayor Mike Bodker said. "How do you make up for the growth that's occurred since our cityhood when we have restrictions on us that stop us from using the normal tools that most municipalities would use?"
But city leaders are studying an innovative funding mechanism that might allow the city to borrow money using the roads themselves as collateral.
"What we're thinking is we can go out and borrow money through lease-purchase like we do all the time for police cars," said City Manager John Kachmar. "This wouldn't require a bond referendum because we'd basically be borrowing money against the assets of the roads."
Many governments use a lease-borrowing system for major purchases by establishing a separate entity called an authority. This is often used for parks or buildings. Ownership of the asset, such as park property, is transferred to the authority and is used as collateral to obtain bonds. Then, the government "rents" the property from the authority for a price equal to the payment on the bonds.
"Basically, the city pays the authority, and the authority pays the bond," said Monte Vavra, Johns Creek finance director, adding that the plan is still speculative and will need legal vetting.
"I've never really done it for streets before, so we could have a few other issues pop up," Vavra said. "We may have to shift to a different logic if we can't find all the suitable parties."
Earle Taylor, a noted bond attorney with McKenna Long & Aldridge, said Georgia law prohibits cities and counties from forming a “streets authority” without majority consent of the voters. He said the city could just as well get voter approval to issue general obligation bonds to fund road improvements.
“They could go out and hold a voter referendum on general obligation bonds to finance streets and roads,” Taylor said. “If voters approve it, then under the constitution that mill limit in their charter gets trumped, and they can levy unlimited millage to pay back those bonds.”
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