Council debates how to pay for streets
JANESVILLE--Just like the wheel in the unpopular wheel tax, Janesville Council members went round and round Thursday trying to figure how to pay $6 million the city needs to accelerate lagging street maintenance.
“This is where the rubber meets the road, so to speak,'” council President Kathy Voskuil said. “We need to talk about the funding sources."
The council did not decide how it would get more money from taxpayers but wants to consider several alternatives:
—By borrowing at a cost of $15.97 each year for 12 years
—By increasing the $10 wheel tax by $38 for three years
—By using reserves
—Or a combination of the above.
The only option eliminated Thursday was a referendum asking residents if the council could lift the state-imposed levy cap. Debt is not capped.
Council members Brian Fitzgerald, DuWayne Severson, Matt Kealy and Jim Farrell decided $1 million could come from reserves.
Council members Kathy Voskuil, Doug Marklein and Sam Liebert did not want ongoing expenses to be paid for with the rainy day fund.
City comptroller Patty Lynch said members might consider using reserves to help pay for a new fire station rather than ongoing expenses.
Most council members shied away from increasing the wheel tax, although Voskuil and Marklein said they might consider an increase of $5 to $10.
Kealy said he was flooded with email from residents who said the council should put the increase on their property taxes so they could at least write it off on their federal tax forms.
Staff figured the savings for the average family would be $1 or less.
Marklein urged council members to borrow the entire amount because interest rates are at rock bottom.
“It's darned near free money,” he said. “I hate borrowing, but at these rates, you can hardly walk away from it.”
Marklein said it is tempting to take the money from reserves.
“But let's say in three years interest rates are at 5 percent and borrowing looks bad,” he said. Then the city could turn to its savings account.
He preferred not to increase the wheel tax.
“The wheel tax is very unpopular,” Marklein said. “It was unpopular when it (was approved) and it was unpopular when I wrote the check a week ago,” Marklein said.
Borrowing the money means all property owners would pay the same, and maintaining streets are the price they must pay to live in a city, he said.
Marklein emphasized that this isn't just a three-year plan but must be a 30-year plan. The increased spending only keeps the city from falling behind more than it is now, he said.
Voskuil suggested a combination of a wheel tax and borrowing.
“I know interest rates are low, but at the end of the day, we're still borrowing,” she said.
Any tax increase will be unpopular and residents will call, Voskuil predicted.
But the first complaints she hears from residents is about bad infrastructure.
“You can't have it both ways,” she said.
“I think this is a rainy-day issue,” Severson said. Reserves have accumulated because former councils should have spent the money and fixed the streets, he said.
Fitzgerald agreed and said, “It's raining. I don't see any point in allowing it (the reserves) to get larger and larger when we have some serious issues to deal with.”
Both spoke against the wheel tax increase.
Council members directed Winzenz to create a spreadsheet showing how various levels of reserves affect borrowing and the eventual cost per taxpayer. He also will include a small wheel tax increase in the scenarios.
The council will consider those numbers Monday, Nov. 14, when a public hearing on the 2014 budget is scheduled.
Meanwhile, the council asked Winzenz to find another $31,500 so members could increase the amount the visitor's bureau gets from the room tax.
The council also decided to eliminate evening lap swim for a savings of $11,271 but maintain morning lap swim.
“Why are we even in the swimming pool business?” Marklein asked.
The city pays the school district so residents can use the pool.