Clark County Board green lights $8 million highway facility upgrade

The Clark County Board of Supervisors voted 26-2 last week to spend an estimated $8 million over the next three years to upgrade county highway department facilities in Neillsville, Loyal and Owen. Part of the multi-phase project will involve demolition of the current highway shop building in Loyal and construction there in 2023 of a new centralized highway department office and maintenance facility.

The Board’s action at an Oct. 14 meeting at the courthouse in Neillsville was part of the process of developing a 2022 annual budget and an adjustment of existing county debt. The highway facility upgrade is planned for 2022-24, with money to be borrowed as it is needed. By the time the county begins to pay off the 10-year highway facility loan, other existing debt will have mostly been retired, allowing the county to maintain its current property tax rate.

The Board last week first approved refinancing of two current loans. It still owes $5.17 million on a $7.5 million note from 2017 for remodeling and expansion of the Rehabilitation & Living Center near Owen, but can now refinance and have the interest rate lowered from 3.21 percent to 2.85 percent, which will save the county $66,358. That loan will be fully retired in 2027.

The Board also voted to refinance the remaining $998,392 of a $3 million loan it took out in 2014 to fund a new communication tower system. The interest rate on that will drop from 3.25 percent to 1.35 percent, saving another $46,147 in interest costs until the loan is fully paid in 2025.

The Board approved both refinancing measures on 28-0 votes.

Next on its agenda was the $8 million highway department project to be funded by a 10-year loan from Citizens State Bank of Loyal at 2.95 percent interest. The county will only make the interest payments over the first three years, with a full principal and interest annual payment of $1.29 million not kicking in until 2026. By then, the communication tower loan will be gone and the Rehabilitation & Living Center loan will have only one year left. That loan does not directly impact the county’s property tax rate anyway as it is being repaid through new revenues created by the center expansion.

During discussion of the highway project loan resolution, Supervisor Ken Gerhardt of Neillsville noted that the county will be mostly debt-free by the time it needs to make full payments on the $8 million note.

“What I’m trying to do is lower the fear factor of the $8 million leverage because other things are going away,” Gerhardt said.

The building plan presented to the Board in September by county Highway Commissioner Brian Duell calls for some work to begin already in 2022, with more construction over the following two years. The Highway Department has its main office/maintenance facility in Neillsville, as well as garage/storage buildings at the county fairgrounds site in Neillsville. It also has a shop/storage in Loyal and another facility in Owen. Upgrades will take place at all three locations, with a main overall goal to centralize department functions in Loyal.

According to the tentative building plan, the 2022 work will include: -- salt and sand shed/Neillsville -$125,000 -- fuel island/Neillsville -- $250,000 -- site work/Loyal -- $200,000 -- cold storage/Loyal -- $425,000 -- site work/utilities/Owen -- $50,000 -- cold storage/Owen -- $150,000 The main project for 2023 would be construction of a new centrally-located maintenance shop and administration office in Loyal. It would replace the main shop/office currently located in Neillsville and will be built at the current highway department garage site on Highway 98 west in the city. That building alone is estimated to cost $3 million, including demolition of the old garage and site work.

Other projects for 2023 would include 1.5 million for a truck storage garage in Loyal, $125,000 for utilities upgrades in Loyal, $225,000 for a washbay in Loyal, and $150,000 for a fuel island in Loyal.

The work would then conclude in 2024 with construction of an $800,000 truck storage shed in Owen, and $500,000 for washbays in Owen and Neillsville.

Supervisor Jim Smagasz of Neillsville asked Duell where the numbers for the $8 million project originated.

“I’m just wondering if this is the cheapest price we can get this for,” he said.

Duell said the county has been working with a Chippewa Falls engineering firm for more than a year to develop plans and cost estimates. The firm first looked at all the department’s facilities and the effi ciencies of locating certain components at certain locations, and recommended a plan to move the main facility to Loyal. It’s the same conclusion that was developed when the county considered upgrading facilities in the mid-1990s. The county went as far as buying 40 acres of land along Highway 98 west of Loyal to build a centralized facility. The proposal to build a shop there was eventually voted down by the Board and the land later sold.

Duell said the new engineering firm also sees a centralized location as the best way to go.

“This whole study was done 20 years ago, as well,” Duell said, and ended with the same recommendation.

Smagasz asked if the county can save some of the old buildings for more use.

“I know they’re old. Are they just not useable anymore?” he said.

Duell said some of the buildings -- such as the garage in Loyal -- date back to the early 1940s. They are too small for current large equipment, he said, and are not effi cient to heat. Duell said size alone is a major factor.

“Since the 1940s, the size of the trucks has doubled,” he said.

On the final vote on the $8 million loan resolution, Smagasz was joined by Supervisor Duane Boon of Neillsville in casting “no” votes.

The Board also looked at the 2022 budget proposal at last week’s meeting. It will be up for final adoption at the next meeting on Nov. 9, and contains a property tax rate almost identical to the one from recent years.

By state law, the county can only raise its property tax levy by an amount equal to new construction value over the past year. The county saw a 1.49 percent increase in total value over the past year, which allows it to add about $250,000 to its total spending without raising the tax rate.

The proposed budget calls for $94.8 million in total spending, a significant increase from the $70.3 million 2021 budget, but the new figure includes the entire $8 million highway department project because the county will be beginning the loan note in 2022. The new budget also includes $3.5 million for further remodeling of the Rehabilitation & Living Center and a $1.5 million upgrade of the courthouse HVAC system, but both of those projects can be funded by the $6.8 million the county will receive over the next two years under the federal American Rescue Plan Act (ARPA) and state pandemic recovery funds.

The 2022 budget proposal also includes $3 million in short-term borrowing to pay for county highway paving. The county could only afford to pave about two of its 301 miles of roads without raising taxes, so it will borrow $3 million and pay it back within a month to help cover the cost of paving about 18 miles. The budget trick is allowed as the state allows a tax levy increase for debt, and the short-term loan counts as that.

The roads to be paved in 2022 include: -- 5.3 miles of County Road K from County Road H north to Chickadee Road.

-- 4.5 miles of County Road H from State Highway 73 east to County Road K.

-- 6 miles of County Road Y from County Road H north to Loyal.

-- 2 miles of County Road G north of Willard.