Officials don’t expect Fredonia Ave. financing will block future projects
Now that the reconstruction of Fredonia Avenue is essentially complete, Village of Fredonia officials spent part of last week’s Village Board meeting discussing how they want to pay for the project.
The work was done in conjunction with Ozaukee County, because the road is also a county highway.
Final billing and change orders have yet to be tabulated, but officials anticipate the local share of the project will be about $1 million.
To cover initial cash-flow needs, village officials tapped surplus funds on hand available in the village’s general fund for $385,000.
That fund has a balance of about one year’s operating expenses, significantly more than the minimum recommended by the state.
Based on current estimates, that will leave the village with a balance due of about $615,000 for the road work.
A 10-year loan for the project would result in annual payments of about $72,280. Shortening the term of that loan to five years would push those payments to $132,072.
Village President Don Dohrwardt told the Village Board, and the Finance Committee in a meeting held just before the board session, he was hopeful a repayment schedule could be created that would essentially result in a steady tax rate.
“We should be able to fit Fredonia Avenue financing into our debt service without a big impact on the tax bill, maybe $2 or $3 literally,” Dohrwardt said.
That debt planning would also include early repayment of some of the principle still owed on the Martin Drive reconstruction. Paying an extra $30,000 a year toward that project could result in it being paid off in three years, about two years earlier than anticipated.
By keeping the tax rate stable, rather than reducing the local tax rate as the village pays off its debt, the village would have the ability to consider other capital projects.
One such project is likely to be fire station renovations, which a recent plan says can be completed for about $1 million. An earlier plan created by an engineering firm suggested a new station would cost more than twice that amount.
By replacing expiring debt with new borrowing, Dohrwardt said it might be possible to start that project as early as 2017.
“If we can fit in financing for a fire station, and come up with a building that will last for 40 to 50 years, I think it is something we should look into,” he said.
A fire station project would probably be paid with a 20-year loan, so that future residents are asked to pick up a share of the cost.
Trustee Jill Bertram, who also serves on the Finance Committee, said she is not yet convinced a fire station should be the community’s highest priority when capital funding is freed up.
“We haven’t seen much growth in the village to justify a fire station. There are some road projects we have been putting off for a long time,” Bertram said.
“There are a lot of other projects we could consider doing, like relining our water lines that date from the 1940s,” Dohrwardt admitted.
Not wanting to get ahead of themselves, trustees simply voted last week to authorize borrowing the balance due on Fredonia Avenue from Port Washington State Bank.
The length of the borrowing will be determined once officials know how much is needed to pay off the road project costs.