Source: Lake Geneva Regional News

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City will borrow more for capital projects

by Lisa Seiser

March 03, 2011

Krause
Two weeks ago, Lake Geneva city officials approved borrowing more than $1.93 million to pay for capital projects such as road repairs and other equipment.

On Monday night the council added 16 more items and $220,000 in more borrowing to that total for computers, lawn mowers, a copy machine, squad car cameras and improvements to the fire station among other items.

Following a lengthy discussion and an initial failure to add a number of items totaling $190,000 to the borrowing, the council voted individually on each of the 23 items previously listed by aldermen as medium level needs, which totaled $386,000.

The borrowing of $1.93 million for the highest ranked needs were approved as a group at the Feb. 14 meeting.

The additional borrowing brings the total up to about $2.2 million, without including an $800,000 to $1 million aerial ladder truck for the Fire Department. City Administrator Dennis Jordan said the borrowing is nothing new for the city of Lake Geneva.

He said in the late 1990s, the city owed $16 million and today, the city owes $4.3 million. Jordan said the city has planned it so as one of the bond payments ends, another is added, so the amount of payment doesn't change, thus requiring no new tax money to be spent to pay off the debt. Currently, the city is paying about $900,000 per year on the current debt. An additional $100,000 was added for the anticipated bonding of around $3.2 million for the capital projects during the next three years.

Jordan said in future years, the city will pay off the debt being incurred now for the capital projects with the money currently being spent to pay off the remaining $4.3 million.

"There are things in here that are needed," Alderman and Finance, License and Regulation Committee Chairman Todd Krause said. "Quite frankly, the only way to get this done is capital bonding. Some of these items need to get shipped onto the budget, but there are items on there that are absolutely needed."

After the council denied a list of items proposed by Alderman Tom Hartz that added up to more than $190,000, Krause voiced his frustration about the capital projects issue, which at that time appeared to be going nowhere.

"These items are not going to fit into the city's operating budget," Krause said. "I have beaten this all up five days until Sunday. I think we are being irresponsible by not considering them. The solution is to go item by item."

Alderman Frank Marsala agreed.

"There are some of us who have different opinions — let's just yay or nay each of these items," he said. "Then, it's settled. I don't know how many times we want to keep going around about these items. Let's just be done with this. Take a vote count and it is either yes or no."

Jordan said the priority list that included the middle priority needs as determined by the council members already had $2 million cut out of it.

"Most of these items are must haves," Jordan said. "Some you have paid money to start and others are at the point of needing replacement. Even if you borrow for this, it is still reasonable. I think all these things are pretty critical and if you don't do them, you are just pushing this off onto another council to deal with."

Jordan also urged the council to think about what might happen at the state level with local municipality funding.

"We face some uncertainty to the future with what's going on in Madison," Mayor Jim Connors said.

But, that wasn't an answer for Hartz.

"We may not have the funds to pay the bonds as well," he responded to Connors. "I just don't agree with the philosophy, borrow, because you have to continue to borrow to make this work."

Hartz urged fellow members of the council to look ahead and try to plan for the future without borrowing — putting money aside in sinking funds and the budget to fund these types of items.

"It will take some effort and courage on our part, but I think we can do it," Hartz said. "But I think we are behind the eight ball regarding some of these projects."

Krause led the way with Hartz to start the process of going line by line to decide on which items would be included in the borrowing.

The following items and costs were approved.

- Copy machine — $6,000

- Doors for the Fire Department — $14,000

- Floor repair at Fire Department — $21,000

- Laptop computer for Emergency Management — $4,000

- Two-way radios — $17,000

- Squad car camera system — $9,000

- Tasers for police — $10,000

- Portable light tower — $3,500

- Computers — $22,500

- Retrofitting doors for Street Department — $5,000

- Parking lot paving at Street Department — $25,000

- 16-foot mower — $16,000

- Veterans park water faucets — $8,000

- Park mower — $11,000

- Brush chipper — $45,000

Items that failed included computer connectivity between City Hall and other city facilities, playground equipment repair, Dunn field stormwater repair and the most costly item on the list, the ProPhoenix fire protection computer system for the Fire Department.

Alderwomen Mary Jo Fesenmaier and Arleen Krohn voted against every item Monday night. On Feb. 14, Fesenmaier was the only vote against the $1.93 million borrowing.

The nearly $2.2 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. Krause, who at previous meetings suggested the city borrow the full $3.2 million amount, said the city is "in good shape" regarding its debt level.

Jordan said the additional $220,000 shouldn't have much impact on the total bond amount. He said it may add about $40,000 to the borrowing.

Aldermen did not discuss Monday night the projected $800,000 to $1million aerial fire truck the department is asking to replace the current 23-year-old vehicle.