Lower building cost doesn’t buy unanimous vote

The Port Washington Common Council on Tuesday set the maximum budget for the new public safety building at $31.9 million, with $27.1 million going toward the actual building costs.

Only Ald. Pat Tearney voted against the amendment to the city’s contract with CD Smith.

“I understand the need for the new facility, but I think the overall price is too high,” Tearney said after the meeting. “I don’t understand how we got to this.”

Tearney said that he felt he owed it to his constituents to vote against the measure, noting the “vast majority” of them are not happy with the project.

Bids for the project, which most recently was expected to cost a total of $33.5 million, were opened earlier this month.

“I was very excited we were well under the maximum ($33.5 million),” Ald. Dan Benning said.

Ald. Deb Postl asked what impact recently enacted tariffs could have on the project.

“We don’t know if there will be any effect on our project,” Ric Miller, a partner with MC Group, the city’s personal representative, said.

But if contractors seek more money due to tariffs, he said, “our position is we’ve received bids. We don’t have any specific funds in our budget for tariffs. There’s a lot of volatility, a lot of uncertainty. We know what our position will be.

“The risk of escalation falls on the contractors.”

Miller told the General Government and Finance Committee, which met before the Common Council, that even though there is a contingency fund, “our job is to protect it like it’s Fort Knox.”

MC Group hopes to minimize use of the contingency fund so there is money left to return to the city when the project is completed, he said.

Mayor Ted Neitzke said he is confident in the price.

“I’m not worried about this (tariffs),” he said.

The city is expected to borrow $30 million in 2025 to finance the building and a $1 million fire engine.

Carol Wirth of Wisconsin Public Finance Professionals presented a financing plan to the General Government and Finance Committee that calls for the money to be borrowed in May at an estimated interest rate of 4.13%.

“Interest rates are going to go up and down between now and when we lock in the rate,” Wirth said.

The plan calls for the city to pay only interest on the borrowing in 2026 and 2027, then pay principal and interest after that.

That’s due, in part, to the fact the city’s existing debt service is high now but will begin to fall beginning in 2028, Wirth said.

The payment schedule is intended to keep the city’s payments relatively stable, she said, especially since there will likely be additional borrowings in the future.

The payment plan will result in an increase of $1.02 per $1,000 assessed valuation for debt service, Wirth said, or an increase of $306 for a house valued at $300,000.

“Three hundred six dollars is a lot better than we were considering,” Ald. Dan Benning, the committee chairman, said, noting that the city had estimated the impact at $573 for the owner of a $300,000 house.

“I think this is the gentlest way of doing it,” Ald. Jonathan Pleitner, a member of the committee, said, noting that the city will be at about 75% of its debt limit, less than the 80% to 85% originally expected. “I think this makes it most palatable.”