PLATTEVILLE, Wis. — Platteville city leaders intend to borrow more money than the debt the city will retire in 2020, breaking with historical practice.
But conflicted Common Council members reasoned that a year of extra borrowing is exceptional due to the necessity of completing a major reconstruction project on U.S. Business 151, most of which will be financed with federal grant dollars.
“It’s really easy to say at budget time, ‘Oh let’s just do it this one time,’” cautioned Council President Barb Daus.
The council’s deliberations this week marked the first review of the city’s 2021 budget, which includes infrastructure projects and equipment purchases.
Among the projects City Manager Adam Ruechel recommended were maintenance work on the exterior of Platteville City Hall, replacement of a safety fence at the Mining and Rollo Jamison Museums and improvements to campsites at Mound View Park. They will be financed with about $680,000 in tax revenue.
But the bulk of the city’s capital budget consists of street projects using funds obtained through borrowing.
Historically, the city borrows only the amount of debt that it pays off the previous year, which in 2020 totals $1.2 million. But three road projects pushed the 2021 planned total to $2.08 million.
In addition to U.S. Business 151 construction, for which the city will borrow $810,488, the council also approved construction on Dewey Street from Water Street to Elm Street. Failing asphalt will be replaced, as will utility lines, at a cost of $1.2 million.
Council members concurred that undertaking the project now ultimately will save the city money because interest rates are likely to increase.
The council also recommended borrowing $75,000 to repair an eroding ditch between Deborah Court and West Golf Drive, which contains electric, telephone and sanitary sewer utilities.
The city carries an outstanding debt of $20.5 million, about 56% of its borrowing capacity permitted under state law. The City of Platteville adheres to an even stricter policy that imposes a debt limit of $25.4 million.
Council Member Eileen Nickels expressed qualms about the council’s proposal for 2021.
“All we’re doing is pushing the problem down the road because if we borrow more money this year, there is going to be less money next year,” she said.
The council will begin the review of the city’s operations budget beginning today, and continue in subsequent weeks. The city will hold a public hearing on Tuesday, Nov. 24, after which the council will vote whether to approve the budget.
The city faces an additional challenge in 2021, as staff expect to collect less revenue due to the economic fallout from the COVID-19 pandemic.
“It’s making the operations budget very tight also,” Daus said. “I think there is no doubt that there will, at least, be a modest tax increase.”