City denied grant for roundabout project

STERLING – Bids for two major city projects were to be approved by the City Council Monday, but plans for one of them – a new roundabout at Lynn Boulevard and LeFevre Road – hit a roadblock. The council approved the low bid of $951,418.95 from Porter Brothers of Rock Falls on the Sterling Market project. The covered public marketplace facility will be built just west of the Twin City Farmers Market at 106 Avenue A. The marketplace project also stalled, but plans got back on track in January when Sterling Today decided to contribute $400,000. The marketplace construction is tied to work that is being done at Sterling Today’s Mercantile building on Third Street. The rest of the Sterling Market work will be paid for with funds from the Central Business West Tax Increment Financing District, which expires next year. Construction on the marketplace should start within 4 to 6 weeks and take about 6 months, City Manager Scott Shumard said. The council also was to take action on the low bid for the roundabout, which included about $100,000 for Douglas Park stormwater sewer improvements. The drainage goes to Lynn Boulevard, so a larger drain is to be installed under LeFevre to better handle the new flow from Douglas Park. The city engineer and staff recommended the council accept the low bid of $942,021.14 from Oregon-based Martin & Co. to do the roundabout and drainage work, but no action was taken. The city had applied for an Economic Development Program grant from the Illinois Department of Transportation. The grant was related to a recently announced warehouse expansion project in the Meadowlands Business Park. City officials say they still can’t make the name of the company public, because they are waiting for a formal announcement from its CEO. The city learned Friday that it would not receive the grant, which could have been worth up to $489,476. The EDP grant targets road projects that are needed for access to new or expanding industrial, manufacturing or distribution businesses. The allocations are tied to job creation and retention numbers from the new or expanding business. “The warehouse would immediately create 150 jobs and we could have received $30,000 for every new job, so that would be about 50% of the project budget,” Shumard said. Shumard and Mayor Skip Lee are seeking more answers from the state after learning the reasons the city’s application was turned down. “IDOT said it was due to not meeting the industry’s criteria, which includes warehousing, so we’re wondering why it was rejected,” Shumard said. “One hour after finding out, I sent a reply saying that anyone familiar with the project would say it meets the eye test.” The mayor said they have contacted state legislators and he and Shumard plan to meet with state Rep. Tony McCombie on Thursday to determine whether something can be done on the city’s behalf. “We’re going to try to appeal this, so we took the bid item off the agenda until the process plays out,” Lee said. The city also was told that the decision was based on a Standard Industrial Classification. The SIC uses a 4-digit code to describe the primary business activity of a company. The city said it was unaware that the SIC system was part of the grant process. “We’ve lost time and money for a grant process based on an SIC code that’s not even mentioned in the grant application. We wrote that we think it’s an arbitrary excuse to not give a grant,” Shumard said. The clock is ticking, however, for council action on the roundabout project. There is a May 30 deadline for approving the bid and starting the work in order to finish it this year. A special meeting would have to be called. Even in the city did get the grant, it learned that even though the roundabout will be at an existing intersection, it would have to go through a 6-month environmental survey process, followed by the state signing off on results, which would rule out starting the work this year. “The company wants to be in operation by the end of the year, so we need to bid it out and be ready to go,” Shumard said. That would mean the city will have to use $500,000 of its sales tax money that could have gone to other road projects. Even though the chances are slim that the state will change its mind about the grant decision, the city wants to send a message about what it sees as a flawed process. “Companies need to make a commitment and this becomes a 2-year process,” Shumard said. “Even if we can’t fix this, the state needs to know that it can’t operate this way and claim to be business-friendly.” The low bid on the roundabout project came in 11.4% below the engineer’s estimate.