Sometimes you have to do what you don't want to do
April 20, 2011 | 07:20 AMWithin the next month or so, the Lake Geneva City Council will have to decide whether to borrow up to about $3 million to pay for a list of things including road work and purchases of public works vehicles and a new aerial fire truck.
In these tough economic times with a focus on state and federal deficits and debts, the financial landscape is changing. People are more focused on government spending, taxes and services at all levels than they have been in a long time.
When it comes to those three — spending, taxes and services — there are always options and choices for a governmental body.
But, when it comes to this $3 million borrowing decision right now for the city, I'm not sure there is a choice.
Over the years, previous council decisions have steered the city in this direction. Past decisions to keep the city's tax rate the same or not cut services and positions as the economy struggled has led to this situation.
During that time, in order to not cut services and keep taxes down, while costs of everything continued to rise, much of the city's extra revenue funds were used for the operating budget. In a perfect world, these funds, including those from the parking and lakefront revenues, would have been set aside for the types of projects for which the city now is planning to borrow.
For those who think that was a mistake, they are probably right. But we can't go back in time and fix it.
I wish I would have started investing for my future immediately after finishing college. There would be a lot more money in my retirement account. But, I can't go back now, nor can I make up for those choices and mistakes made earlier.
The city is in a similar situation.
There appears to be little question road repairs in the city to the tune of about $1 million over the next three years are much needed. Aldermen also agreed that several new vehicles were needed for the public works department and, by a slim margin, it was agreed that a new aerial ladder truck was needed at a cost of about $875,000. There are several more items on the list that are smaller, but were agreed upon by a majority of the council to be included on the list for borrowing.
If there is no borrowing, none of this will happen, at least not in the next year or two.
Some have suggested to wait three or four years, try to build up reserves for these projects and not borrow. That's a good idea in theory, but it just doesn't seem to be an attainable solution.
Waiting will just make the road repairs, fire truck and other vehicles more costly in the long run. As you keep older equipment, repairs become more costly and as years go by, new vehicles seem to cost more and more. It also would also be difficult to set aside up to $3 million in such a short time. These are items the city should have been planning on for many years, not just three or four.
I don't like borrowing. We should all strive to have as little debt as possible. That includes governments at all levels.
However, very few of us would own a residence if it weren't for borrowing and taking on some debt. Sometimes you have to do what you don't want to do.
This time, borrow to fund these items. But current and future councils must better prepare for the future needs of this city without using borrowing as a crutch or the easy way out.
It's time to get serious. Tough budgetary decisions will have to be made. It must be understood that every budget impacts future choices that can be made.
In the simplest form, sinking funds must be created for large purchases. And those funds must never be raided to balance the budget.
Significant amounts of money should be set aside each year to fund big ticket items, such as public works and fire vehicles. Smaller items such as computers, radios and weather sirens must be included in the operating budgets for the departments.
In about eight years, residents of the city will know whether you did a good job planning for the future.
If another borrowing like this one is needed — you didn't.
Seiser is the editor of the Regional News.