Portage council ponders debt, infrastructure

January 14, 2019 GMT

The Portage Common Council pondered Thursday how the city can hold the line on debt and still keep its infrastructure and facilities in good shape.

“We can’t go backward, and we can’t stand still,” said Mayor Rick Dodd.

The council’s president, Mike Charles, presided over a committee of the whole, which featured a two-hour discussion of the city’s long-term capital improvement plans.

Council members worked from an information packet detailing planned projects for streets, parks, city buildings and other capital expenditures, most of them from 2018 through 2022.

Only for last year and this year are the costs more or less firm, said City Administrator Shawn Murphy. For projects scheduled in 2020 and beyond, the costs are estimates, he said — and the figures don’t include interest.

General obligation borrowing is paid back with increased property taxes, Murphy explained.

Council member Bill Kutzke said that’s a reason to take a hard look at debt and expenditures — to minimize the burden on property owners who also are assessed for taxes from other taxing bodies, such as schools.

But council member Dennis Nachreiner said the city’s infrastructure is vital.

“I don’t like paying taxes any more than anybody else,” Nachreiner said. “But the majority of our debt is for infrastructure. We’re not building the Taj Mahal.”

Murphy said the city has a policy of restricting debt to 4 percent or less of the city’s assessed valuation, and not paying back debt in an amount that is more than 0.25 percent of assessed valuation.

For each year, 2018 through 2022, the percentage of debt in relation to valuation is well within the self-imposed limit, Murphy said, though the percentage is projected to creep up between this year and 2022, peaking at 2.9 percent.

But the percentages for debt service are a little more worrisome, Murphy said. The cost of paying off debt in 2022 is projected to amount to 0.22 percent of valuation — almost to the limit.

One issue that the council will need to decide soon is whether to borrow this spring not only for this year’s projects, but also for next year’s.

On the one hand, Murphy said, some of the projects planned for 2020, and their costs, are uncertain. They could end up not being done at all, or their costs could turn out to be higher or lower than projected — making it difficult, if not impossible, to know exactly how much to borrow.

On the other hand, the city will likely save on interest, and on costs relating to debt issuance, by borrowing this year for two years’ worth of projects, he said.

One of the costliest infrastructure projects planned for 2020 is the reconstruction of West Conant Street from Pierce Street to West Carroll Street, for which the city expected to take on debt of $700,000.

But in the same year, the capital improvement plan includes another big street project — design and construction for Ontario Street, Thompson Street, East Wisconsin Street and Wauona Trail, to prepare for detours during a 2021 state construction project on Highway 16-51. That project could entail another $600,000 in debt.

Several council members asked whether one of those projects could be pushed back a year or more, and if so, which one.

Council member Rita Maass said she opposes delaying the Conant work, because a new performing arts pavilion in Pauquette Park, paid for by the Portage Service Club Association, is likely to go up at about the same time.

“You can’t bring people to this nice new facility, yet not have the road repaired,” she said.

Maass also raised concern about the condition of the historic grandstand at the city-owned Columbia County Fairgrounds.

Nachreiner said, however, that he can’t support spending money on the grandstand — whose refurbishing could cost in excess of $1 million — unless there also is a business plan whereby the city can get income from activities there, besides activities associated with the Columbia County Fair such as tractor pulls and rodeos.

Dodd said he saw merit in all the positions the council members stated.

However, he said, infrastructure and recreational facilities are vital factors in quality of life.

“We have to continue to make Portage a place people want to live,” he said.