Officials talk ideas for no more municipal borrowing
July 20, 2011 | 09:24 AMCity of Lake Geneva officials want to make sure their most recent borrowing of $3 million will be their last, at least on their watch.
Aldermen, the mayor and officials have agreed they want the city to become debt free. They're looking for ideas to make that happen.
"I would like to pick your brains," Alderman and Finance, License and Regulation Committee chairman Todd Krause said last week. "If we put a plan together, we can make it."
City officials have talked about trying to set up sinking funds and capital project funds to pay for items such as vehicle replacements and road projects, among other improvements. Funds for projects would be set aside in advance instead of having to borrow.
"None of us wants to borrow for future projects," Alderman Tom Hartz said.
According to 2008 Wisconsin Taxpayers Alliance information, the city of Lake Geneva is on the low end of long-term general obligation debt totals.
The 2008 numbers show Lake Geneva with $6.55 million in long-term debt. That compares to Delavan, which in 2008, had $25.8 million in debt and Elkhorn with $22 million.
Other cities with similar populations, such as New Richmond, had $22.5 million in debt, while Prairie du Chien, which is smaller, had $9.8 million and Plymouth $15.3 million. Currently, the city's debt is at $4.3 million, but that figure will increase with the latest borrowing.
However, despite the low debt amounts and solid Moody's rating, officials want to take a new course when it comes to finances.
City officials have said there are possible ways to make the city debt free, including possible tax rate increases, closing the Tax Incremental Financing District and increasing parking rates, among other options like decreasing expenditures and finding more revenues.
In five years, the city's current debt payment will be cut in half, allowing up to $500,000 to be put into a fund instead of debt repayment.
Alderman Terry O'Neill said there will have to be a combination of budget cuts and increased revenues to make this goal a reality.
He also mentioned a premier resort tax and that there are positives and negatives that come from closing the TIF district.
City Administrator Dennis Jordan said the city must keep up its infrastructure because of its tourism. He said there are other possible options, but would not mention any more during the Committee of the Whole meeting last week.
Krause said the city is "fortunate" to have some of its revenue sources, such as parking, that other communities don't have. Krause also said the city's budget has been cut in some areas, but added that it is not as "lean" as it could be.
But Alderman Al Kupsik said city budgeting is tough and these plans may be "easier said than done."
Members of the council are expected to continue discussions about the future of borrowing at upcoming meetings.
Krause said he still would like to hear any ideas aldermen have about how the city could reach the goal of not borrowing again.
After months of discussion about whether to borrow to pay for a new aerial ladder truck, road repairs, public works vehicles and various police items, the council voted 5-3 last month to borrow nearly $3 million at an interest rate of 2.425 percent.
City Administrator Dennis Jordan said the city should receive the money by early July, when it will be placed in a capital improvement fund.
During the next three years, the money will be used for items including an $875,000 fire truck, plow vehicles, computers, storm sirens and to repair alleys and streets throughout the city.