Council considers borrowing $15 million
The council on Monday added an additional $350,000 to the initial borrowing resolution, boosting the amount that City Manager Steve Sheiffer set aside for building maintenance to $150,000.
The council is set to finalize approval of the 2008 note issue May 27, and it can cut the $15 million it tentatively approved at Monday’s meeting. It cannot, however, add money.
The additional $350,000 would increase general fund debt about $1 million from 2007, or about 21 percent. The increase without the added money for building maintenance was 13.9 percent.
The note issue includes money for street maintenance, which is a change in philosophy. Sheiffer is shifting some of the city’s operating costs into debt service to help close a projected budget deficit.
The state caps the city’s operating levy but doesn’t cap its debt service.
Sheiffer predicts an operating deficit of $523,000. The deficit assumes normal wage and health insurance cost increases and higher gasoline and diesel fuel costs.
Sheiffer proposes closing that gap through efficiencies, for a savings of $100,000, and by moving $423,000 for street maintenance from the operating budget to debt service.
Sheiffer said in a memo that this is a reasonable way to address the community’s operating and capital needs but still maintain current service levels.
“I also believe the projected tax increase is reasonable, given that the cost of living is projected to exceed 3 percent,” Sheiffer said.
Sheiffer is predicting a tax rate increase of about 3 percent.
Of the $15 million note issue, $6 million will be repaid by the general fund.
Other sources of repayment include special assessments, $4 million; water utility, $2 million; the wastewater utility, $1.1 million; and tax incremental financing districts, $915,000. The remainder will be paid by the sanitation fund, Hedberg Public Library and the storm water utility.
For instance, the city is borrowing $420,000 for curb and gutter replacement. Of that, $170,000 will be assessed to abutting property owners and $250,000 will be paid for by the general fund.
About 60 percent of the borrowed money will be spent on infrastructure.
Eight projects that had been planned for the 2008 note issue have been deleted for a total of $3.6 million.
For instance, $1 million to build an aquatics facility was removed, along with $255,000 for the transit center. The city will wait to borrow money for the transit center until it gets more federal funding.
Closing the landfill cell has been delayed because of lower-than-anticipated trash volume and higher-than-anticipated compaction after a second compacter was added. That saves $700,000.
However, others projects were added, including funding for the youth sports facility and a downtown parking ramp.
The council on Monday added more money for maintenance. Councilman George Brunner said repairs to the Tallman House museum could cost $1 million alone.
“I think there are projects regarding building maintenance and infrastructure that could use improvements that we may be putting off,” Councilman Russ Steeber said.
Borrowing would fund many projects
Some projects to be paid for with the 2008 note issue:
-- First-year funding to build a downtown parking ramp, $1.25 million. A three- or four-level structure is proposed at the corner of Wall Street and North Parker Drive. This is the first of three years of funding.
-- Property acquisitions previously OK’d by the council, $780,000. The city over the last several years bought properties that were paid for in part through the general fund. They include: the Swingers Batting Cages, Dooley Photography, Westphal, Energetics, Northrup Awning, Alliant Tech, Sanford and Riverside Plating. The general fund portion has not yet been funded through a note issue.
-- First-year funding for a new central fire station, $500,000;
-- Partial funding for the Youth Sports Complex in partnership with Janesville Youth Baseball to develop additional softball and baseball fields, $500,000. Public improvements include roads, parking lots, utilities and restrooms. This is the first year of two years of funding. In addition, $400,000 will be available from lot sales. Total city costs are estimated at between $1.3 million and $1.4 million.
-- Police Pistol Range renovations, $60,000. Improvements will include replacement of the broken target retrieval system, which is not working.
-- Salt storage building at $195,000. A third facility is being built to improve efficiency of snow removal operations and increase salt storage.
-- Street extensions, $1.2 million.
-- Sidewalk repair and replacement, $425,000.
-- Street maintenance and improvements, $500,000. This is a five-year program that should allow the city to catch up on maintenance.
-- Renovate Ruger Park, $35,000.
-- Wastewater treatment plant land, $200,000. The land will create a buffer between the treatment plant and nearby residential properties. This is the first year of a five-year program that will total $1 million.
-- Technology enhancements, $750,000. Money will go to the city’s Information Technology Strategic Plan to “provide citizen satisfaction through the use of information technology,” $300,000. The city will spend $350,000 to integrate the city’s computers. This is in addition to spending $350,000 in 2006 to replace the city’s land management/computer-aided mass appraisal software. This year’s is the second phase of a four-phase project. And $100,000 will be spent on Geographic Information enhancements, also an ongoing process.
-- Snow-fighting technology, $70,000. An anti-icing spray unit will cost $20,000. Cost to equip all lead plow trucks with geographic tracking and data capabilities is $50,000.
THE NEXT STEP
The Janesville City Council will consider borrowing $15 million at its meeting Tuesday, May 27. The meeting begins at 7 p.m.