Elkhorn ponders spending cuts
A go-ahead nod, however, was given to what those officials said was the long-planned and much-needed reconstruction of North Washington Avenue.
At the behest of City Administrator Sam Tapson, the city council's finance and judicial committee discussed two of his memos about potential fiscal troubles linked to Walker's budget and the means to safeguard against them.
Tapson told the committee he expects a shortfall of at least $150,000, dropping city revenue by more than 6 percent.
The state budget, which is not fully understood and subject to changes during approval debates, might contain unknown cuts that also would affect Elkhorn-size communities, he said.
Tapson stressed he was merely giving officials options on dealing with the downturn in state money and its effect on city spending.
"My job is to make the council aware of the situation," Tapson said before the meeting. "Are we better off holding back and retaining the money to cover revenue shortfalls over the coming years?"
The two projects being considered are resurfacing Koopman Lane, O'Connor Drive and Deere Road in the industrial park and rebuilding North Washington Avenue.
Committee members agreed the industrial park project should be delayed until the city knows more about the budget's affect on its finances. They passed along that recommendation to the council.
The North Washington Avenue project calls for borrowing $2.25 million to $2.55 million. Construction is slated for mid-June.
Committee member Scott McClory captured the sentiment of the panel by saying too much work had gone into planning the project to pull it off of the table.
"It's not going to get done by staring at it, and it'll get more expensive the longer we wait," McClory said.
In a report to the council, the committee will express its support to proceed with borrowing for the road reconstruction. The money will be there if needed, but the city also can delay the project should the budget fiscal numbers hit Elkhorn hard.
Assuming $2.25 million is borrowed at 3.25 percent interest with a 10-year repayment, the average homeowner would pay 36 cents per $1,000 of home value or about $76.25 a year for a $195,000 home that appreciated 2 percent annually, according to figures supplied by Tapson.
"I thought it may be prudent to step back a moment and review the impact of the planned borrowing," Tapson wrote.
About $1.2 million in road repair financing was supposed to come from surplus revenue, known as increment, drawn from the industrial park's successful tax incremental financing district.
By halting the industrial park road project, city officials reserved the surplus in case money was needed to maintain operational services.
The two recommendations will go before the council at its April 4 meeting.
Last updated: 4:45 pm Thursday, December 13, 2012