Source: Lake Geneva Regional News

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City will borrow to fund projects

by Lisa Seiser

February 17, 2011

The city of Lake Geneva likely will borrow at least $1.9 million to pay for capital projects including road repairs and equipment over the next three years.

However, at least for now, the borrowing won't include a new $800,000 Lake Geneva Fire Department ladder truck.

After contemplating during the last several weeks a total borrowing of more than $3.2 million, which included a new ladder truck, City Council members voted 7-1 Monday night to borrow for only the top priorities on the list. That list totals more than $1.93 million. An effort to borrow the full $3.2 million amount including the fire truck and middle level priorities failed on a 3-5 vote. Aldermen Todd Krause, Bill Mott and Ellyn Kehoe were in favor of the full expenditure, while Alderwoman Mary Jo Fesenmaier voted against all motions related to the borrowing.

Following the council meeting, Mayor Jim Connors said he will talk to council members to determine whether further discussion regarding the fire truck should occur. During the meeting, Connors supported the idea of the full $3.2 million bonding, including for the fire truck. But the council approved bonding only for the top priorities. A second effort to add the middle priority list of about $350,000 also failed, on a 7-1 vote with Mott the only one in favor.

The $1.93 million borrowing is expected to be a 10-year bond at a relatively low interest. Currently, the city has about $4.3 million in debt. Alderman Todd Krause, who suggested the city borrow the full $3.2 million amount, said the city is "in good shape" regarding its debt level.

"I didn't make this motion lightly," Krause said. "This will cost $1.1 million in interest. We can look at other options not to borrow, but there are capital issues that need to be addressed and I don't know if there are any other options."

Most of the discussion Monday revolved around whether a new fire truck was needed.

Alderman Tom Hartz questioned the lack of information proving the real need for a new ladder truck. He questioned whether the city's fire rating would be affected by having a 23-year-old fire truck. He said other aspects go into determining a fire rating for insurance purposes, including available water, training and dispatching.

But, Alderwoman Ellyn Kehoe was adamant about the need for a new fire truck. Her concern focused on public safety.

"I think we're picking this apart," Kehoe said. "Let's not compare us with the city of Milwaukee. What you are doing is stalling."

Hartz disagreed. He said he was not comparing Lake Geneva to another city. Hartz said the issue is about an $800,000 truck, which over the length of the loan, will cost closer to $1.1 or $1.2 million.

"We've been told it's an emergency," Hartz said. "If we make a decision on that and it's not accurate (what happens)? I'm not stalling, I'm just asking for accurate information."

Kehoe said over the 20- to 25- year life of the fire truck, the cost is distributed each year. She called the fire truck one of the "most important safeguards in the community."

That's when Connors said it is time to borrow for the truck. He said he "doesn't like to borrow," but the costs are only going to increase as the need continues.

Hartz said the city must stop repeating the borrowing at some point.

"What is the reason why we need a new truck?" Hartz asked. "Should we burden the taxpayers $1.1 million? I don't know."

Alderman Frank Marsala said this is not the time to purchase a new truck.

"We have to look at what we need truly," Marsala said. "This is not something we need. We scrounge for pennies and then without much thought we decide to borrow $1 million. I am not saying we don't need it at some point, but we may not need it now. I can't justify spending that money now. We should be frugal right now."

Questions about priority responses

Fesenmaier was the lone vote against the $1.93 million borrowing, but did not say why. She also was the only alderperson to not submit a project priority list to City Clerk Jeremy Reale as requested by Krause, chairman of the Finance, License and Regulation Committee.

Fellow Alderwoman Arleen Krohn said she submitted her priority list, but said she was told the wrong information of how to number which items were high and low priorities, rendering her responses moot. She said she was told placing a No. 1 on the item meant it was a low priority, while a No. 3 meant a high priority.

But, during the meeting Monday, when asked by Connors what she thought about fire protective gear, she said she considered that a high priority and the fire truck was a low priority. Based on the priority list compiled by Reale, Krohn labeled the fire gear as No. 1 priority and the fire truck as a No. 3. Many of Krohn's answers were in line with other aldermen, specifically Hartz and Krause. Also, a document Reale provided after the meeting showed handwriting on the top explaining to Krohn which numbers meant which and stated a No. 1 meant high priority.

Krohn, Fesenmaier and Marsala did not respond to the initial priority listing last month and were asked a second time to submit their opinions.

To see the priority list and all seven aldermanic responses, log onto the city's website, to city agendas, click on the Feb. 14 packet and go to page 38 of the PDF.