After expressing their frustration, council members bit the bullet and approved 3-1 a motion for the city to cough up $42,400 for improvements done on J Street last year, improvements they had believed were covered by stimulus funds.
Councilman Mike Gonzales was absent and excused from the meeting.
The $1 million project was the first in the state to be approved for funds from the American Reinvestment and Recovery Act. But the city was recently notified that 40 water service connections that were replaced in the project were not covered and that the city owed $42,400 for it.
Councilman Aaron Kircher was the lone dissenter, and before the vote made a motion to postpone payment until he could review new regulations now in place concerning stimulus money for projects. The motion died for the lack of a second.
The $42,400 will be paid for with left-over city sales tax revenue that was budgeted for another street project this year, which will replace water mains on South Street and Kelley Park Drive. Bids for that project came in under construction estimates by about $55,000.
Councilman Lonnie Anderson pulled the item from the consent agenda and started off discussion with two words: "What happened?"
McCook Street Engineer Greg Wolford explained that it was lack of communication and the fact that J Street was the first stimulus-funded project in the state. As such, policy was still being written at the time and since the J Street project was the first of its kind, "we got to be the guinea pig," he said
Policy from the federal highway administration changed sometime during the construction and the Nebraska Department of Roads, the pass-through agency for the funds, did not notify the city of the change until after the project was done.
After repeated calls, city staff learned that water connections were considered betterments and not covered under the funds, although the original amount was reduced by $9,000 for fire hydrants that were relocated when curbs were moved back.
It was not fair that the rules were modified mid-game, Councilman Jerry Calvin stated.
"Changing the rules is fine for 'CandyLand' but not when it's $42,000," he said.
Councilman Kircher agreed, saying that the city can't budget or use taxpayer's money responsibly if changes are made without notification.
"Somebody, somewhere, dropped the ball," he said, adding that the water connections could have qualified under a water infrastructure project. "It was their mistake and now they want us to pay the bill."
Councilman Kircher asked for a conference call with officials from the federal highway department, for accountability and how a mistake like this can be prevented in the future for other projects. "Nobody benefits to just smile and take it," he reasoned.
Mayor Berry agreed it was unfair for the city to be stuck with the bill, but noted that city staff has already talked with the NDOR four times about the issue, with little solved.
"When is enough, enough?" he asked. "You can only poke a dog with a stick so many times before it bites you," he said, recalling a time years ago when state and federal agencies were reluctant to work with the city because of the perceived lack of cooperation.
The bottom line, Mayor Berry said, was that, fortunately, there is city sales tax revenue available to pay for the unexpected cost, and in the long run, the city received a substantial chunk of money for the project.
A more productive way to make sure other cities don't get caught shorthanded is to bring it up at next week's League of Municipalities meeting, City Manager Kurt Fritsch said.
Rules and procedures for projects using stimulus funds have now been finalized, eliminating the likelihood of this happening in the future, said Public Works Director Kyle Potthoff.
Kircher was not swayed, but his motion to postpone payment was not taken up by the rest of the council.
Improvements on J Street spanned roughly 17 blocks, from West 10 to Norris Avenue, and included resurfacing, installing handicap-accessible curbs and left-hand turning lanes on West Fifth, and replacing 50-year old water service lines connections.