County budget debate begins
Supervisors OK 'preliminary funding analysis' for 2014
Tuesday, June 25, 2013 7:00 PM
MARINETTE - If Tuesday's meeting of the Marinette County Board of Supervisors is any indication, there could be a lot of heated debate during the 2014 budget process.
The debate started on Tuesday after the board approved a five-year capital improvement plan that calls for $10,834,200 in projects to be done next year.
The proposal includes $8,973,000 in work on county highways in 2014.
Supervisors eventually followed that vote with approval of a "preliminary funding analysis" that proposes $9,435,200 in bonding.
Other proposed funding sources for the capital improvement plan include $75,000 from the property tax levy, $226,000 from the county sales tax, $755,000 from highway restricted cash, $75,000 from the forestry and parks fund, $80,000 from grant and aids, $85,000 from fund balance and $103,000 from the forestry heavy equipment fund.
County Administrator Ellen Sorensen and Finance Director Pat Kass defended the recommendation to fund most of the capital improvement projects through bonding.
Sorensen said bonding is the "most cost-effective thing for the county to do" and that the county would receive good interest rates because of its "robust general fund."
"I've looked at the numbers and I think based on where interest rates are and where they are going I think this is the best viable option for the county at this time," Kass said. "I don't make policy and I don't make interest rates.
"I don't know what the future is going to bring. If you want to fund the projects in front of you this is the recommendation we are coming forward with."
"I believe in open and transparent government," Sorensen said. "I have to bring you the realities of what is going on.
"It is your choice to make policy and how you choose to address it. We're just bringing you the reality of what is occurring right now and asking that you discuss policy, determine policy and then determine how to fund it. We will then implement it."
One supervisor voiced total opposition to bonding while others said they needed more information about the impact of it before they voted on the funding plan.
"Whenever I see bonding I go negative," exclaimed Supervisor Clancy Whiting, stressing the cost of the massive federal debt.
Supervisor Kathy Just, board vice chair, called for the vote on the funding plan to be delayed for a month.
"This is a serious decision," she said. "Are we going to bond or are we going to use excess funds?
"We need to have some numbers in front of us to say 'yes' it would be wiser to do this or 'yes' it would be wiser to do this. How much is this going to cost us on our tax bill? These numbers need to be in front of us before we go ahead."
Kass said the county's financial advisor estimated $9,435,200 in a 15-year loan or bonding would cost about 20 cents per thousand dollars or $20 per year for the owner of a $100,000 home.
"I would like to see these numbers put on a sheet of paper even though they are just estimates," Just said. "Then we would have a chance to study them and see what's best.
"I just don't know if this is something we need to do today. Can we wait until next month? Give us a change to go into our districts and tell the people the possible scenarios and ask 'how do you feel about this.'"
"I agree completely with Kathy," added Supervisor Alice Baumgarten. "This information should at least have been in our packets so we had time to study it.
"I'm going to vote 'no' because we don't have enough information. We want to see those figures (for the best- and worse-case scenarios)."
Kass said he can't give exact estimates of the impact of bonding because "I don't know what the future holds."
"I understand that, but tell us what you think it is going to be today," Just said.
Supervisors Don Pazynski and Connie Seefeldt both said they favored borrowing over use of other funds the county currently has.
Pazynski said not using excess funds the county has invested will make the county more credit-worthy right now and able to get lower interest rates.
"Nobody likes to borrow money," Seefeldt said. "But we haven't seen interest rates this low in I don't know how long. I think it's a good time to bond."
Supervisor Vilas Schroeder, county board chairman, agreed with Just that supervisors should wait until July to vote on the funding plan.
"This is a big decision to make at this point," he said. "If you've driven around on the county roads you know the needs are there.
"It's just a matter of where the money is going to come from. I can understand the hesitancy to make a decision today. Next month we need a decision because the budget process is going to have to start."
Supervisor Al Mans said supervisors need to trust the recommendations of their Finance Committee and county officials.
"The reason we have the committee structure that we do is that they hash this all out ahead of time and then bring it forward," he said. "They supposedly have all the wisdom to make a wise decision.
"We hire Pat (Kass) to watch over the finances. We're paying him to do this. What are we talking about, we're not professionals in finance."
Mans then made a motion to cut off debate that was approved by a 24-4 vote. Then the "preliminary funding analysis" passed by a 23-5 margin.
Sorensen called bonding a "two-part deal," explaining that the board next needs to approve a "resolution of intent" and that the actual bonding would not take place until 2014.