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City approves borrowing for unfunded projects
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Two weeks after his request for a $90,000 loan for a variety of city projects was tabled by the Finance Committee, Boscobel Director of Public Works Mike Reynolds was back Monday night with a revised proposal.
"Prices are going up. Expenses are going up, and budgets are going down," Reynolds said. "I know budgets are tight, but we've got a city we have to maintain."
Reynolds presented the committee with four loan options:
1. $135,000 to crush recycled blacktop ($20,000), purchase a dump truck/plow ($100,000 with $35,000 already budgeted), repair park shelters ($15,000) and reconstruct three blocks of Pearl Street ($180,000 with $142,000 already budgeted);
2. $80,000 to purchase the truck and repair the shelters;
3. $70,000 to reconstruct Pearl Street, repair the shelters and crush the recycle;
4. Do nothing.
"I certainly do not recommend doing that," Reynolds said of Option #4.
City Administrator Arlie Harris said the city of Boscobel has budgeted so tightly in the past several years with no tax increases that several departments are currently in the red, including:
•Airport: $18,700;
•Swimming Pool: $18,000;
•Police: $8,500; and
•Public Works Administration: $6,000.

"These departments are going to have some serious problems next year if we don't find some money," Harris said, adding, "Also, our contingency fund is down to $5,000. It used to be $25,000. That's not much for your house, much less a city."
However, borrowing money means paying it back, and several committee members wondered how that was going to be accomplished given the city's revenue constraints.
"By borrowing all this money, where are we going to budget the payments?" asked Barb Bell.
"If you look at last year's mill rates, everyone went up but us-the county, the school, the state," Harris responded. "If you borrow you can increase your tax levy according to the state. Otherwise you are saddled with a state-imposed revenue cap."
Harris said that according to the state's relatively new revenue and levy cap system, increasing debt service is the only way a municipality can increase its tax levy. For example, by not increasing its debt service over the past two years, the city's tax levy has fallen from $1 million in 2010 to $960,000 in 2011.
"So you are rewarded for borrowing? asked Nancy Sanger.
"Yes," said Harris. "As far as I can see, that's your only way out."
"That's crazy," said Bell. "That's like paying your MasterCard with your Visa."
"It's not frivolous stuff," Harris said. "We're borrowing so it doesn't get worse. We played it so close to the vest for so long that when they changed the rules of the game we had no wiggle room left."
The Committee, and Council, finally voted unanimously to approve Reynolds' second option, borrowing $80,000 to buy a new dump truck with plow and repair the park shelters. The Pearl Street project will be put off until 2013. They also added $51,000 to cover the four department shortfalls for a total of $131,000.
"We're on a slippery slope and the state isn't doing anything but pushing us down the hill," Harris said. "I hate to paint a doom and gloom picture, but that's where we're at, and I can't imagine it's going to get any better."
"It really upsets you," added Mayor Steve Wetter. "No one does budgets tighter than Boscobel, and look how we get paid back. It just doesn't make sense."