The process for the City of Rhinelander spending nearly $2 million on street work picked up considerable steam this week as both the public works and finance committees cleared the way for the two major components of the process to head to the city council.
This coming Monday, the Rhinelander City Council will be asked to approve a resolution that will finalized the city's biennial borrowing of $3.085 million for 10 years that includes both the capital borrowing and $2 million that will be repaid over 10 years by part of the revenue generated by the Premier Resort Area Tax (PRAT).
At Tuesday's meeting of the finance , wage and salary committee, city administrator Keith Kost said that by combining the two loans into one package, the city saved money in the long run.
"The bottom line is, you saved fees of over $20,000 by combining them into one," Kost said.
If the council authorizes the sale by passing the resolution Monday, the next step in the process would occur March 26 when the official statement on the bond sale would be distributed and a conference would also be held on that date with the rating agency. After that, the award of the sale of the bonds would be made at the April 9 council meeting, with an estimated closing date of May 1 on the sale.
"So we'll have the money in hand for the road projects, etc.," Kost said.
Finance committee chairman Mark Pelletier said the amount being borrowed and the items it would finance had been approved by the committee and the full council in February.
"There will be no increases in taxes (for debt service) and the rest of it will be paid for by the PRAT," Pelletier said.
After seconding the motion to approve the pre-sale report, alderperson Alex Young said that using half of the annual PRAT revenue to finance $2 million in street repairs was a wise use of the money to get the most work done immediately.
He also pointed out that the city's outstanding debt and tax levy was low compared to some other cities in Wisconsin.
"We have been conservative in recent years in how we've used debt," Young said. "Our debt is scheduled to be paid off, more or less, by 2036. But if you compare us to some other municipalities around us, the city of Wausau, for example in 2014, had $47.9 million in debt and as of 2017 they have $78.3 million. Compared to other communities who are increasingly relaying on debt to finance things, and probably levying their futures out a little more than they are comfortable with, I think we've done a pretty good job."
Pelletier also noted that the loan was taken out for only 10 years, not 20 as the city could have done. This means the city is using debt more strategically, especially by leveraging the PRAT revenue to do a lot of work this summer.
"We've done our homework, everybody has," he said. "And this is much better because we'll have more road projects in 10 years," Pelletier said.
At Monday's public works meeting, public works director Tim Kingman outlined the process the city will use for seeking bids for the nearly $2 million in street work.
"We have a nearby community that is going to go to bid on some very similar work to this at the end of April," Kingman said. "And what we are intending to do is to advertise in the middle of March and take a bid on the 29th of March. We would want to turn around that bid and bring it to this committee on April 2, if that is the date that we are meeting."
The final bid approval would also come at the same April 9 city council meeting where the final bond sales will be approved.
"I don't think we will have any difficulty getting it under bid, I think it is a very good climate out there, from what we're hearing," Kingman said.
Jamie Taylor may be reached via email at email@example.com.
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