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Tapson: Slow project borrowing

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Darryl Enriquez
August 10, 2011
— The city of Elkhorn might want to consider less borrowing for planned capital improvement projects until the economy improves, City Administrator Sam Tapson wrote in a memo.

One council member agreed with Tapson's fiscal assessment, while another said the memo needed more study and discussion.


"I do think Sam Tapson is thinking the right way on this," freshman Councilman Jerry Anderson said. "It's a weird time right now with money. It's getting tight, and we need to be more cognizant of what needs to be done. We don't have the green light to spend, spend, spend. We need to be frugal."


Councilman Gary Payson said he needed to examine the memo in detail to understand what it means.


"It posed the question: Do we really put a cap on borrowing right now or continue fixing the things we've been fixing?" Payson said.


The city now carries $18 million in debt, and debt retirement in 2011 will cost taxpayers about $937,000, which was about 26 percent of the city's $3.6 million tax levy.


Of the $6.37 levied per thousand dollars of property valuation, $1.57 was for debt payments.


"The city's use of debt authority to support a rather aggressive series of capital improvement projects over the past 10 to 12 years is largely responsible for recent property tax increases," Tapson wrote.


The city for the past decade has aggressively repaired aging streets, including downtown thoroughfares.


"Current economic conditions may be a reason to contract if not suspend borrowing for the near term (one to three years)," he wrote. "This is not to suggest that necessary projects should be deferred, which frequently proves to be an unwise decision."


Borrowing should continue for closing the city's aging municipal well on Centralia Street and the environmental cleanup of a closed adjacent industrial site. The city also must deal with sealing its sanitary sewer pipes to decrease the amount of groundwater that leaks into them, he said.


Tapson on Tuesday clarified his memo by saying the city council should consider not borrowing for the 2012 as a way to keep the tax levy in check.


"I don't think the suspension would be for a long period, possibly we could get by with just a year," he said. "Let 2012 rest, and let's look at 2013.


"I think because we will continue to do routine street maintenance, we won't lose a lot by deferring major street reconstruction projects."


Tapson's memo will be studied by the finance committee before going to the city council later this month or in September.


Tapson's memo includes about $23 million in suggested projects through 2015.


Discretionary projects include:


-- $4.5 million for street and the utility improvement to East Centralia, South Jackson, South Washington and South Wisconsin streets.


-- About $325,000 in park improvements, including new lights for the Harris Field ball diamond, a new shelter for Babe Mann Park and playground equipment for Sunset Park.


The $10 million for the multi-year project to open new city water wells should not be delayed, the memo reports.


Future projects without financing include replacing the aging Sunset Pool, which the city council has indicated will be considered only with a referendum. Money to run the pool will be included in the 2012 operations budget, Tapson said.


Officials also must consider replacing the department of public works maintenance garage and City Hall renovation, he said.



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