Dunn County could borrow $11.6 million in 2027 for highway shop and keep same debt payment
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By LeAnn R. Ralph
MENOMONIE — Dunn County could borrow $11.6 million in 2027 for a highway department storage building and renovating the existing building and still pay the same amount for debt service.
The goal is to maintain the debt service payment every year at $5.3 million and that includes borrowing for the highway shop project and borrowing $3 million every year for highway projects or capital improvement projects, said Dan Dunbar, assistant county manager, at the Dunn County Highway Committee’s November 6 meeting.
PMA Financial, Dunn County’s financial consultant, was asked to project the debt service payments with $3 million in borrowing for highway and capital improvements along with $11.6 million for the highway shop project, Dunbar said.
Several years ago, the Dunn County Board agreed to adopt a capital improvement plan (CIP) for the following year and for subsequent years that would be funded by up to $3 million in borrowing each year if need be.
Capital improvement projects can include replacing outdated computer equipment and other electronic equipment, replacing department vehicles or one-time projects such as replacing the locks on county buildings. The $3 million in borrowing also has been used for highway department projects.
Borrowing $3 million each year for capital improvement projects keeps the debt service levy the same because while the county is borrowing $3 million, the county also is paying off debt.
Hwy. shop
Since some of the county’s current debt will be paid off along the way, the county could borrow. $3 million in 2025 and 2026 and then borrow $11.6 million in 2027 along with another $3 million for highway projects or capital improvements, Dunbar told the highway committee.
The money for the highway shop project would be paid back over 20 years, he said.
Gary Bjork, county board supervisor from Colfax and a member of the highway committee, asked if the borrowing in 2027 also included $3 million for highway projects.
In 2027, the borrowing would be for the highway shop and $3 million for road projects, said Dustin Binder, Dunn County Highway Commissioner.
The debt would be structured to maintain the same level of debt service the county is paying today, he said.
In 2036, the debt payment decreases because the other debt will be paid off, Dunbar said.
For the purposes of financial projections, the borrowing of $3 million for highway projects or capital improvements would end in 2029, he said.
Other than the highway shop project and capital improvement projects, there are no other large county-wide purchases planned, Dunbar said.
Judicial center
One member of the highway committee asked how the $11 million the county borrowed for the geothermal and solar project at the Dunn County Judicial Center would impact the highway shop project.
The geothermal and solar project for the Dunn County Judicial Center will allow Dunn County to take money that is now being paid to Xcel Energy and put the money toward debt service instead, Dunbar said.
The judicial center project will not raise the debt levy, he said.
Dunn County will receive $3.4 million from the federal government through the Inflation Reduction Act for clean energy credit, Dunbar said.
If the debt service payment each year for the judicial center geothermal and solar project is $600,000, and Dunn County will be saving between $300,000 and $400,000 per year on heating and cooling the judicial center, the money can be put toward the debt service payment, he said.
The difference between the money that Dunn County is no longer paying to one company for heating and cooling and the debt service payment can then be taken out of the energy credit money received from the federal government, Dunbar said.
Since the cost of electricity keeps increasing, in 10 years, Dunn County may be saving $500,000 per year in energy costs by using geothermal and solar for the judicial center, he said.
When the $11 million is paid off after 20 years, the energy savings money that was paid toward debt service can then be used for another part of Dunn County’s budget, Dunbar said.
