Waupaca may reduce tax levy
Budget hearing set for Nov. 20
By Angie Landsverk
City of Waupaca taxpayers would see the city tax rate drop by a penny under the proposed 2019 budget.
The city’s rate would be $9.66 per $1,000 of assessed valuation, a .10 percent decrease from the present rate.
Kathy Kasza, the city’s finance director and treasurer, reviewed the proposed budget on Nov. 7, during the common council’s meeting.
“We’re proposing the levy go down by $68,854,” she said. “Since 2017, we’ve been reducing the levy every year.”
The city’s proposed levy of $3.25 million is down 2.11 percent from the present levy of $3.3 million.
The levy would support a proposed General Fund expenditure budget of approximately $7 million.
That compares to this year’s budget of $6.93 million.
Under the budget being proposed, the city’s debt service would decrease 5.68 percent, from $1.134 million in 2018 to $1.07 million in 2019.
The refinancing of city debt and better interest rates allowed the city to reduce its debt service, Kasza said.
A public hearing on the proposed city budget will be held at 6 p.m. Tuesday, Nov. 20, in the council chambers, located in City Hall’s lower level.
Also discussed during the council meeting was how to fund the city’s capital improvement plan.
The city planned to borrow this month through the State Trust Fund Loan Program (STFLP) to cover the cost of some of the 2018 projects.
The council instead voted 10-0 to establish a $500,000 line of credit with Farmers State Bank to finance smaller capital items.
The line of credit will have a fixed rate of 4 percent, with interest paid semi-annually (March and October) and then the principal the following year.
There will be a $500 closing fee.
Kasza recommended the council take this action due to the interest rate increasing for the STFLP.
“It was no longer a viable alternative, so we looked at the local banks,” she said.
The Board of Commissioners of Public Lands raised the STFLP rates to 4.25 percent on a 2- to 5-year note and 4.5 percent on a 6- to 10-year note, Kasza said.
The city’s short-term capital projects had been financed with 1- to 2-year STFLP notes.
When the program’s interest rates increased, Kasza sought financing options from local banks, including JPMorgan Chase, Bank First, Farmers State Bank and BMO Harris.
She said the most favorable option was to obtain a $500,000 line of credit for a fixed term, at a fixed rate.
Bank First and Farmers State Bank both provided that option for five years, at a fixed rate of 4 percent.
Since the options were the same, Kasza flipped a coin to determine a recommendation.
The coin flip resulted in Farmers State Bank being the final recommendation.
She said Mayor Brian Smith agreed with it due to the bank’s involvement in the community.
Each year, the city will borrow what it needs for short-term projects, Kasza said.
“The advantages are I can borrow it as I need it,” she said. “I can also pay it after 13 months with debt service levy.”
Projects approved and purchased this year (that were to be funded through the STFLP) will be financed through this line of credit.
That $172,477 total includes:
• $10,000 for annual computer replacements.
• $16,000 to replace a park rake machine.
• $10,000 to relamp field lights at Swan Park.
• $110,400 for a new patrol squad.
• $12,850 for a forensic phone analyzer in the Police Department.
• $5,817 for improvements in the senior center office.
• $7,410 toward the replacement of taxi vehicles.
In 2019, a total of $156,000 in capital projects will be financed through the line of credit.
These projects are:
• $12,000 for a city hall/library wiring project.
• $25,000 for the first two phases of a project involving Rasmussen Park.
• $10,000 for annual computer replacements.
• $15,000 for Serenity Park’s boardwalk and accessible trail.
• $10,000 for a restoration project in Riverside Park.
• $62,000 for a new patrol squad.
• $10,000 for a GPS Rover unit.
• $12,000 toward the replacement of the King bus.
The city plans to borrow $1.55 million for its large capital projects.
These are projects with a life of more than 10 years.
The proposed projects in 2019 include the reconstruction of Evans Street, engineering and design for Main Street, reimbursing the purchase of the Midtown Motors property, engineering and design of Granite Street and downtown alleys, upgrading city hall’s phone system, seal coating Appletree Lane and Farm Drive (sharing cost with town of Waupaca), replacing a snow blower and designing and starting construction of a salt shed for the Public Works Department.
The city plans to go out to market next spring.
It would be a 10-year financing, with the first debt payment due March 1, 2020.