Highway committee seeks borrowing for shop, roads
The Taylor County Highway Committee at its meeting on Tuesday approved borrowing $1.75 million for a new Rib Lake highway shop and $1.75 million for road projects.
Finance director Larry Brandl told the committee he and highway commissioner Ben Stanfley had talked about borrowing $1.75 million for the new Rib Lake shop and another $1.75 million for road projects. He said the county would be able to borrow the money at this time at a rate of 2 percent or maybe even slightly less than that.
Brandl said as a small borrower, the county would have three years to spend the money and felt the county could tailor its repayment schedule to keep the mill rate at where it needs to be. “There are a lot of factors which are favorable for us to borrow at this time.”
Brandl said by April 2022 the county will have paid off the last of its debt service. He proposed the county borrow $5 million before the end of the year as part of a package to borrow up to $14 million for the highway shop, road and county-wide broadband projects, as well as the county’s share of the dam projects and possible additional cell phone towers.
Committee member Ray Soper asked what the advantage was to borrowing a lump sum of money before they needed it rather than borrowing it for each individual project. “When we borrow money without having a specific use for it, we start paying interest on it immediately. What are the disadvantages of borrowing it piecemeal?”
Brandl said the disadvantages is that market conditions change and so will the costs. He said the reason to borrow part of the money this year is so that the county wouldn’t be a large issuer or borrower (over $5 million) because there would be more SEC (Securities and Exchange Commission) rules and red tape the county would have to follow. He added it takes about three months to complete the process of borrowing the money and if the county waited until it needed the money, it could delay the project. “There would be some cost involved to borrow in advance, but that’s going to be part of a trade off.”
Soper asked what would be the process for borrowing the money. Brandl said if the committee approved moving ahead with borrowing the money, he would meet with the county’s financial advisor to draft a broad resolution of intent to borrow which will go to the finance committee and ultimately to the full county board for its approval.
Committee chairman Scott Mildbrand said the last time the county borrowed for a road project, it helped to lessen the number of years the county was behind in repaving roads. He said the average time between repaving county roads is 20 to 22 years and that in some cases that time frame was being stretched out to 28 years. “So $1.75 million will help us considerably in getting that time down. Having said that, with the strange year we’re been having and people driving less, my guess is that our share of road aid is going to be less next year. Now would be the time to do this to keep up with our road maintenance.”
Committee member James Gebauer agreed. “It’s all money we’re going to spend down the road anyway, whether we do it now or we do it later. Now seems to be the time to do it with interest rates what they are.”
Mildbrand said the county’s finance committee has issued a directive for departments to cut their budgets by 2 percent. He asked Brandl how borrowing the money would fit into that directive. Brandl said it really wouldn’t have any affect on it because debt service is outside the levy limit, but it will help the county to keep its mill rate flat. Brandl said last year it dropped because the equalized value in the county increased “by quite a bit.” but they couldn’t use it all because the county was up against the levy limit. “I think our equalized value — and I won’t know this until August — is going to increase again and I’m going to have the flexibility to use some of that to keep our mill rate flat and not have it drop so much. If it keeps dropping, at some point we’re almost going to have to do something like a referendum to exceed our levy limit to make our budget work. I’m trying to avoid doing that.”
Bridge aid
The committee also approved two requests for bridge aid.
Stanfley said the first request was from the town of Cleveland to replace a culvert on Konsella Drive. He said the current 48-inch culvert keeps getting plugged by beavers and that the bottom of it is rusted out, creating issues with water over the road. He recommended the town increase the culvert to an arched 60-inch culvert 38 feet long. Total cost will be $16,510, which would be shared equally between the county and township.
Stanfley said the other request was from the town of Greenwood to replace culverts on Evergreen Drive. He said the two existing culverts were 48-inch round ones 64 feet long. Stanfley said it would be more cost effective to use two 48-inch culverts rather than one larger arched type. He said the cost would be $14,920 shared equally between the county and township.
