Janesville's debt will grow
JANESVILLE The Janesville City Council would add $14.42 million to the city's debt if it approves a suggested borrowing program.
Council members Monday night will be able to delete items from the borrowing note.
Staff will ask the council to award the sale of notes to the lowest bidder Oct. 22.
The council is being asked to borrow a total of $16.97 million; $14.42 million would be new debt and $2.55 million would be debt issued to refinance prior notes at lower interest and to restructure payments.
The note issue is slightly below the average of recent years, Assistant City Manager Jay Winzenz said.
The city's total debt at the end of 2011 was $74.8 million. The city will retire $13.3 million in debt in 2012 and add $14.42 million in 2013, pushing the total to $75.9 million at the start of 2013.
"What we try to do is more or less match the amount we are borrowing with the amount we're retiring so over time our amount of debt remains relatively stable," Winzenz said.
Of the $14.42 million, about $5.66 million would be paid through the general fund, which is funded by local property taxes.
The rest would be paid by the water and wastewater utilities, the library, TIF districts and special assessments.
Slightly more than half of the $5.66 million is to pay for projects already authorized by the council.
General fund borrowing of $5.66 million would require annual payments of $632,033, costing the owner of a $120,100 home about $20 a year for 10 years.
Because some debt is being retired and other debt is being restructured, overall general fund debt is estimated to increase about $100,000, or 1.93 percent in 2013. That would increase the property tax levy by 0.38 percent.
In 2013, the owner of a $120,100 home would pay an additional $3.11 in property taxes to pay off debt.
Of the proposed $16.97 million:
-- $2.3 million would be used for streets, including $30,000 to repair the concrete piers and foundation for the corrugated arches over Spring Brook in Palmer Drive and to repair the downtown parking plaza concrete deck.
-- $480,000 would be spent on storm sewers.
-- $895,000 would be used to buy, improve and maintain parks and public grounds, including $60,000 to rebuild three of the nine tennis courts in Palmer Park; $110,000 to expand parking at the Youth Sports Complex; $40,000 to replace playground equipment at Adams Park; $225,000 to buy blighted properties; $50,000 to repair the bike trail in the Palmer Park area, which was built in 1994; $310,000 to buy the building at 55 S. River St., the former Plaza Furniture; and $100,000 to repair Traxler Lagoon sidewalk and railing.
-- $1.55 million for public buildings and grounds, including $220,000 for energy-saving measures in city facilities; $780,000 for the ice arena renovation; $200,000 to build a multi-purpose room at the ice arena and update the Rockport Pool bathhouse; $100,000 to design an animal control facility because the Rock County Humane Society will not accept dogs whose owners are known; $60,000 to update City Hall elevators; and $185,000 for Tallman House improvements.
-- $100,000 for repairs to the downtown parking plaza, which will allow about half of the closed stalls to reopen.
-- $4.45 million to replace fire vehicles, golf equipment and equipment for the new automated waste collection.
-- $1.6 million to cap the current landfill section.
-- $1.12 million to construct and extend water mains, including $580,000 to replace lead pipes under the streets.
-- $1.53 million to build and extend sewer mains.
-- $400,000 to finance infrastructure improvements in TIF No. 25, which is on Kennedy Road north of Highway 14. The improvements were made between 2003 and 2011 and were paid for with the general fund. The TIF district has a negative cash balance, so is now borrowing money to pay back the general fund.
-- $2.55 million to refinance notes at a lower interest rate and extend the terms of the notes to reduce annual debt service.
Winzenz warned council members at their last meeting that two large capital projects loom in 2013 and 2014: a new fire station, for which the city would have to borrow $6 million, and an animal holding facility at a cost of more than $2 million.
Winzenz projected debt would go up $500,000 in 2014 and about $1.6 million in 2015.
"We need to start having some discussions if we're looking to cut some of that back," City Manager Eric Levitt said.
Based on previous discussions, council members might discuss reducing parking improvements at the Youth Sports Complex and delaying repair to the bike trail.
A motion to remove $30,000 for the Palmer Park tennis courts failed on a 3-3 vote.
Councilmember Sam Liebert made several suggestions to add to the debt, noting low interest rates. He suggested borrowing more to maintain city streets—that motion failed—and adding $50,000 for a skatepark—that motion did not get a second.
He asked whether the council could add money to the note issue for such nonprofit agencies as ECHO and HeathNet and was told the city could only borrow for capital projects.
On Monday, the council can only delete debt and cannot add.
Kealy wants city to cut debt
Several council members apparently took to heart a new survey gauging taxpayer preferences when they voted against borrowing money to repair tennis courts in Palmer Park.
Councilman Matt Kealy also asked council members to drive past Adams Park to see if $40,000 proposed for new playground equipment is needed.
The council at its last meeting was discussing borrowing $14.4 million for capital projects. A second vote will come before the council Monday.
The survey, commissioned by the council, puts parks and recreation at the bottom of several categories when it comes to how some taxpayers want to see their money spent.
The survey was done to help the council make budget decisions.
Kealy at the last council meeting noted Friends of Riverside Park refurbished tennis courts there and wondered if a users group could help out at Palmer Park.
Councilwoman Kathy Voskuil said the school district uses the courts for competitive tennis. Repairs have been delayed for several years, she said.
"It's gotten to the point where there are literally potholes in the tennis court," Voskuil said.
Kealy, DuWayne Severson and Deb Dongarra-Adams voted not to borrow $60,000. That failed, though, with Jim Farrell, Sam Liebert and Voskuil voting to keep it in. Russ Steeber left the meeting early.
Kealy said after the meeting that the survey shows a majority of residents would like the council to either reduce services or raise user fees in such areas as parks and recreation rather than raising taxes.
Kealy said he is taking a close look at items included in the borrowing. Some, such as replacing playground equipment, should be handled in the general fund, he said.
When the city borrows money, it has to pay it back, with interest.
Several large projects are looming in the next couple of years, including a new fire station, he said.
"We need to take a better look at needs versus wants," he said. "Certain things, like infrastructure, should be our top priority. The big thing is being responsible to yourselves and future generations."
Kealy said he hopes other council members will come to Monday's meeting armed with "hard questions and directions to control spending."