City acknowledges long-term plan needed
By Bert Lehman
The Finance Committee for the city of Clintonville has recently held two special meetings to discuss the future path the city takes regarding the city’s capital improvement projects and city debt.
The meetings come on the heels of the city’s debt dominating the discussion at several meetings over the past couple months.
In 2015 the city council had approved a five-year capital improvement plan to fund projects through 2020. Since then several unexpected and costly projects have come up that needed to be addressed. This forced the city to have to make $1.1 million in capital improvement project cuts.
These cuts were approved by the Finance Committee and the City Council in July.
“We had this discussion with Ehlers as well and the conclusion basically is that we need to cut a significant amount of our projects from the 2016-17 program to bring the amount of debt down from what we would borrow,” Clintonville City Administrator Chuck Kell told the Finance Committee at its July 11 meeting.
The biggest cut approved was a new rescue-pumper fire truck scheduled to be purchased in 2017. The city’s portion of the new fire truck would have been $375,000.
The fire truck would have replaced Rescue No. 970 (1991) and Engine No. 967 (1994), with the intention of reducing the fleet by one vehicle by combining the vehicles to fit the needs of the department. It would have also created space for equipment currently not on a fire apparatus, in addition to creating room for items stored outside to be stored inside.
According to NFPA guidelines adapted by Wisconsin, fire apparatus is to be on frontline duty for 15 years, and no more than 25 years of service. According to the proposed 2017-21 City of Clintonville Capital Improvement Plan, Rescue No. 970 has surpassed 25 years of service, while Engine No. 967 is nearing the end of its life cycle.
The new fire truck was originally in the 2016 capital improvement budget, but was pushed to 2017, with 2018 delivery due to budget constraints last year.
“I don’t believe a one year delay in replacing these two vehicles is going to be problematic for the fire department,” Kell said in a Sept. 18, 2015 memo to the city council.
At a Sept. 21, 2015 Finance Committee meeting, Clintonville Fire Chief Shane Krueger supported the decision, but expressed caution.
“Based on some history with the fire department, the backing out of fire department purchases for apparatus is why we’re in this position to have multiple pieces of apparatus in need of replacement in short order,” Krueger told the committee in 2015.
He said that is why the fire department now has an aggressive replacement plan.
Krueger added that even though he agreed the purchase of the truck could be delayed one year, he said the truck needed to be a high priority next year and not forgotten.
Now that truck will be delayed at least one more year.
Not delayed another year is needed equipment that was scheduled to be included on that fire truck, including a new Jaws of Life. Kell told committee members at the July 11 meeting that the Jaws of Life the fire department currently has can’t cut some of the newer vehicles.
With that in mind, Kell told the Finance Committee that Krueger told him a new Jaws of Life and other needed tools and equipment could be purchased for $25,000. That amount stayed in the capital improvement budget.
In total, $611,000 in cuts was recommended by the Finance Committee at the July 11 meeting.
The committee also recommended using around $500,000 from undesignated fund balance for a Green Tree development project, if the project moves forward.
“It will be paid back through new taxes generated by housing that’s built and we would special assess the cost of these utilities,” Kell said. “When they sell the properties those special assessments will be paid back to the city. You’ll recoup it. It may take 10 years to recoup the whole amount.”
The city council approved those recommendations at a council meeting the next night.
At a special Finance Committee meeting on Aug. 10, Kell presented to the committee each capital improvement project and each equipment purchase that department heads have requested.
One week later, the Finance Committee discussed how to reduce the city’s debt, while at the same time moving forward with as many capital improvement projects and purchases as possible.
Kell told the committee that he had spoken with Todd Taves of Ehlers, the city’s financial advisor, about possibly putting together a 10 year plan to reduce the city’s debt. Kell added that he needed the committee to set targets to hit throughout that period in order for the plan to be developed.
“It’s probably going to take 10 years to reach it,” Kell said. “I don’t think it’s going to be a reachable objective in five years.”
As he has at several meetings, Kell once again said the city needs to consider looking for new revenue sources.
The committee also discussed a timeframe to lower the city’s debt service tax rate. That tax rate is currently at $4.15 per $1,000 of equalized value. The council recently approved a financial policy that calls for that tax rate to be around $2 per $1,000.
Committee member Lance Bagstad said in order to get down to that figure it would require reducing that tax obligation by around 19 cents per year for more than 10 years.
“That’s significant dollars when you start multiplying that by your equalized value,” Bagstad said.
He added that there has to be flexibility when targets to hit are determined.
“I don’t think anything beyond five cents is quite honestly realistic,” Bagstad said later in the meeting.
He recommended Kell work with Ehlers to put together a presentation as to what it would take to reduce the debt service tax rate by three, four and five cents per year.
The committee decided to have Kell work with Ehlers to create a presentation with different scenarios to reduce to debt service rate.
The committee also discussed possible ways to lower the amount needed for capital improvement projects. One idea discussed was the possibility of privatizing some services which would eliminate the need for some equipment purchases. Also discussed was developing an equipment purchasing schedule so the purchase of new equipment is spread over a number of years and not all done in the same year.