EM authorizes proceeding with state trust fund loan for $583,000
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By LeAnn R. Ralph
ELK MOUND — The Elk Mound Village Board has approved proceeding with an application for a state trust fund loan in the amount of $582,995 for 2019 capital projects.
A state trust fund loan is a better option than issuing bonds, said Sean Lentz, a financial advisor with Ehlers and Associates, at the Elk Mound Village Board’s August 7 meeting.
Lentz noted he had spoken to the village board about a month ago concerning a preliminary finance plan for the village’s projects that would have involved issuing bonds.
The capital projects to be financed by the loan include a village truck, a street project and a Supervisory Control and Data Acquisition (SCADA) system for the sewer and water utilities.
SCADA systems gather and analyze “real time” data and are used for monitoring and controlling equipment in a variety of industries, such as water and wastewater management, as well as telecommunications and oil and gas refineries.
At the July 10 meeting, the Elk Mound Village Board awarded the proposed SCADA project bid in the amount of $319,754 to L.W. Allen LLC.
The state trust fund loan would be a 20-year repayment at 4 percent interest and prepayable at any time, Lentz said.
If the village applies for a state trust fund loan and then draws the funds after September 1, there would be no payment on the loan until 2021, with a loan payment period from 2021 to 2039, he said.
Not having to make a payment until 2021 will avoid a spike in the debt levy, Lentz said.
Elk Mound’s last bond issue was in 2007, and since then, more reporting requirements have been implemented, he said.
Many villages are outsourcing the reporting, which costs between $750 to $3,000 per year. The state trust loans are not subject to the additional reporting requirements, and the bond issue from 2007 also is not subject to the new reporting requirements, Lentz said.
Refinancing
Elk Mound may want to consider refinancing the 2007 bond issue as well, Lentz said.
A state trust fund loan to refinance is one option, but Lentz said he believed the village could “do better” with a local bank and that he would check with the banks and bring the information back to the board at a September meeting.
After the $583,000 is borrowed, Elk Mound will have a remaining debt capacity of $604,000, Lentz said.
If other projects come up that must be completed, the village will still have $604,000 to use, he said.
Since Elk Mound will have no payments on the state trust fund loan until 2021, the debt levy will stay pretty much the same and will start to decrease in 2025 if no additional loans are taken out before then, Lentz said.
Sewer and water rates
The village’s sewer and water utilities will generate sufficient revenue to cover the debt payments on the old debt and on the new debt but will essentially be at the “break even” point, so the village board may want to consider sewer and water rate increases, Lentz said.
At the July 10 meeting, the Elk Mound Village Board approved authorizing Pat Hahn, village clerk-treasurer, to apply for a simple water rate increase of 3 percent with the Public Service Commission of Wisconsin and also approved increasing the sewer rate by 3 percent.
Elk Mound’s sewer utility is deregulated, so the village board can approve increases without going through the PSC.
Elk Mound has applied for the water rate increase, and it has been approved by the PSC and will go into effect in September, Hahn said, adding the sewer rate increase will go into effect at the same time.
By sending out the requests for proposals now to refinance the 2007 debt, the village board will be able to refinance the debt by the time of the next debt payment on November 1, Lentz said, noting he would include a request in the RFP for the 2007 loan to be eligible for early repayment without penalties.
The Elk Mound Village Board unanimously approved authorizing Hahn to proceed with the state trust fund loan from the Board of Commissioners of Public Lands.
Voting “yes” on the motion were Steven Abraham, village president, and village trustees Rebecca Livingston, Greg Kipp, Terry Stamm, Deborah Creaser-Kipp, Montana Grotthus and Paula Turner.
Other business
In other business, the Elk Mound Village Board:
• Learned that Mark Levra, director of public works, is recommending the village board revise the policy for use of the Elk Mound Lions Club Park after a weekend recently when the park had been rented and those using the park left multiple bags of garbage, did not implement recycling and left multiple cardboard boxes that had not been cut down and flattened. Levra said he was recommending a larger deposit or asking renters to leave a credit card number on file to cover the cost of cleaning up the park if the renters did not clean up after themselves.
• Approved a certified survey map for E101 Elk Mound Drive for Kris and Joe Becker.
• Approved an Eagle Scout project at Lower Mound Hill Park for Alex Miller to build a pavilion with a concrete floor. The pavilion will be similar to the pavilion constructed directly east of the Elk Mound village hall.
• Approved changing the next meeting date from August 21 to August 28.
• Approved authorizing Hahn to contact the village’s legal counsel to update Ordinance 7-1-7 dealing with vicious and potentially dangerous dogs to add a provision for liability insurance. Police Chief Weinberger said he was recommending people who are determined to have potentially dangerous dogs be required to have liability insurance. Vicious dogs are prohibited under the ordinance. Potentially dangerous and vicious dogs does not refer to any particular breed, but rather, refers to a dog’s behavior in unprovoked attacks on humans or other domestic animals. The recommendation is within 30 days of being determined to be a potentially dangerous dog, the owner obtains $500,000 of liability insurance for bodily injury or death with a $1 million limit.