Construction crews with the city of Denison started work Monday on a $2.17 million series of projects that will see improvements and repairs to 18 lane-miles of roads, including many in low-income areas. Officials with the city celebrated the start of the construction with a ceremony and check handing ceremony with representatives from the U.S. Department of Housing and Urban Development.

The city will be funding a portion of the project using a $1.55 million loan issued through HUD’s Section 108 program. The city will pay off this debt over the course of the next 10 years using a portion of its annual Community Development Block Grant funding, which is provided through HUD. These funds, which come to about $310,000 a year, are designed for improvements and rehabilitation in low- to moderate-income neighborhoods.

“Really it is an innovative and creative way to use CDBG funds,” Denison Mayor Jared Johnson said following Monday’s ceremony. “Really there is nothing you can do that will have a bigger impact on people’s lives than a major road project.”

Construction crews will remove and replace the top layer of asphalt for nearly 100 blocks of the roadways on 52 Denison streets. Crews started their work Monday by milling the top layer of asphalt on Mirick Street, near Scott Middle School.

The crews will collect the pieces of old asphalt and incorporate 10 percent of the recycled material with new asphalt that will be used to coat the roadway’s surface, Development Services Director Gabe Reaume said. The remaining material will be saved by the city and utilized in other future projects, he said.

“You can think of it as a giant piece of sandpaper,” Reaume said. “It grinds up the asphalt and they collect it and take it back to the plant.

Planning and development for the roadway improvements first started about two years ago with a collaboration between the city officials and the city’s CDBG committee. Before 2013, the city would allocate about $300,000 annual for street overlay projects.

These roadway projects follow a pavement study conducted by the city in early 2016 that awarded an average score of 62 out of 100, which represents “fair” condition, to Denison roadways.In late 2016, Public Works Director Bobby Atteberry said the city planned to upgrade this score to about 65 through overlay projects.

The city historically has used its funding allocation from HUD for major and emergency residential repair projects. However, the program was limited due to the funding available for each individual project and the increasing cost for construction, City Manager Jud Rex said previously. So the city began to explore other ways to utilize this funding source in a way that would benefit the entire city. It was during this search that CDBG officials discovered the Section 108 program, Denison CDBG Chairman Bill Lindsay said.

Last year, the city approved changes to the CDBG program to set aside funding to pay off the debt of the future loan. Under these changes, the city proposed using $190,000 of its annual CDBG funding for debt service while setting aside $75,000 for emergency residential repair projects. The city would also set aside funds for administrative costs related to the CDBG program.

Jerry Jenson, representing the HUD Fort Worth office, said the 108 loan program has proved popular with cities over the years and is heavily used. In an average year, HUD will guarantee about $300 million in Section 108 loans throughout the country. These loan guarantees are based on the city’s needs at the time of the application.

“The city has been working for many years to improve these neighborhoods,” he said.

Earlier this year, the city council signed a resolution stating that it would pay off the loan debt using its general fund in the event that CDBG funding disappears. This came as an initial draft budget proposed by President Donald Trump’s administration featured significant cuts to HUD and the elimination of the CDBG program.

In addition to the $1.55 million in loan funding, the city will also be allocating about $250,000 in previous years’ CDBG funding. The remainder of the $2.2 million will be financed using funds previously allocated for street repair and maintenance. The funding provided by the city is not limited to where it can be used, unlike the CDBG funding.

Johnson said this year’s street projects are important because of their focus on low- to moderate-income neighborhoods. Johnson said many of these neighborhoods have recently seen redevelopment under the city’s affordable housing program, which incentivizes the development of low-cost, infill housing options in existing neighborhoods. By offering public improvements, Johnson said the city could further entice developers and other private reinvestment in these areas.

At its peak, Reaume said three crews will be working on the project at any one time. Although the contractor has 90 days to complete the project, Reaume said he expects to see completion in about eight weeks.