Chief Supervisor Southwestern Illinois Flood Prevention District Council
IBJ: How has the levee restoration project been progressing?
Sterman: We’ve been making progress – not as fast as I would like or had hoped – but we are making progress. We’re gradually getting the design through the Corps of Engineers review process. The nature of the beast is that in order to get through this process, you have to do everything exactly as the Corps would like, as opposed to what might be unfamiliar or even innovative. They just want to do things that they’ve already done and seen before. So we made a decision to simply follow their direction – whatever that may be – and we’ve pushed just about everything through the review process. We essentially abandoned the graded filter concept. Not because we don’t think it’s more effective and in fact offers a higher level of protection, but because the Corps just continues to resist it – and it would take a long, long time to convince them, if ever. It just didn’t seem like a good expenditure for that kind of money, so we just basically backed down and we’re doing the tried and true relief wells, berms, etc. We’re moving ahead. By the end of this summer or early fall we will presumably have awarded bids on all of the construction for the project. We have three more packages to get through. And it looks like we may be able to offload portions of the project to the Corps since they’ve received some pretty sizable appropriations for the project for next year.
IBJ: How did the Corps get these appropriations?
Sterman: I can’t really answer that question. I don’t know whether it’s political expediency or they’ve changed their internal priority setting process, but it looks like they’re going to get upward of $15 million for the Wood River and MESD levees. The real question, then, is really two questions: 1) Can they do it at a cost that actually saves us money because we still have to contribute upward of 35 percent of the project cost when they do it? and 2) Can they do it on our timeline? We’re trying to beat the clock relative to Federal Emergency Management Agency remapping, so the Corps needs to meet our schedule in order for this to work.
IBJ: What’s the status of construction?
Sterman: We have two bid packages on the street for work in the southern portions of the system, in Prairie DuPont and Fish Lake. The way it’s working out, the feds will never spend any money down there. But in terms of our design, they’re actually running a little bit ahead because they’re a little simpler and less costly. So that’s certainly evidence of progress. We’re involved now in acquiring property – mainly easements. That could be difficult. A lot will depend on how quickly we’re able to proceed with property acquisition before we can start construction.
IBJ: How is the property acquisition going?
Sterman: We’re struggling a little bit with that. We don’t need a lot of property. And again, mainly we need easements more than anything else.
IBJ: How is the Corps’ 408 review process going?
Sterman: It’s taken well over a year. It’s cost us well more than $1 million just in preparing documentation, responding to questions by the Corps and redoing things when they want them redone. It’s been an expenditure of time and money that, in my view, has not added value to the project, but that’s the nature of the beast. Interestingly, comparing notes with my colleagues in California, they budget three years and $3 million a project just to get through the 408 process. So I guess one could argue that we’ve done relatively well. But it’s still infuriating at times. I don’t really see any value in it, and it’s been costly for us.
IBJ: How is the Flood Prevention District doing financially?
Sterman: Financially, it’s kind of mixed. We have a pretty good financial plan that will cover all of our proposed expenditures and then some, but sales tax receipts have been running behind for some reason. I’m not sure whether that’s a quirk of the way that they are reported or there was a real decline. For example, the sales tax receipts reported for June – which actually reflect the March collection – show that we’re down more than 7 percent from the previous year, the previous March. That just doesn’t seem credible. That’s a huge drop on a year-to-year basis. And it had been down the previous month by a smaller percentage but, nonetheless down. So if that continues as a trend, we’ll have to adjust the financial plan. But I think we’ll still be OK.
IBJ: How might that impact your financing?
Sterman: The coverage ratio on the initial bond issue is fine, but we need to issue some more debt in order to complete the project – probably over the next year to year and a half. The amount we will be able to raise is certainly predicated on the expectation of stable or increasing sales taxes over time. It will create a real rating issue for us if we can’t show a pattern of increase in sales tax. It has been fine until probably the last six or eight months. It’s very curious. I would speculate that the state is holding out on us, but I don’t think they can for this type of sales tax.