Falls board approves capital project financing

Menomonee Falls - The Menomonee Falls Village Board on Monday approved financing for 2013 capital projects.

Road projects, as well as funding the design work for a new fire station in the southwest portion of the village are on tap for 2013. A new fire station, as well as replacing fire station one will be done in 2014. Stormwater and road reconstruction work is slated for Christman Road that will fix drainage issues and mitigate flooding in that area this year.

Menomonee Avenue, from Lavergne Avenue to Town Hall Road will be reconstructed.

"A massive storm sewer project needs to be undertaken to help with drainage in that area," Director of Engineering Services Tom Hoffman said. Water mains, that have experienced a number of breaks in years past, will be fixed on Megal Drive from Pilgrim Road to Cherokee Drive.

Work will also be done on Lepper Dam to remove sediment buildup that is causing Mill Pond to become shallower.

Funding different this year

Funding for the capital budget is different from past years and is meant to help village funding in the future and maintain a level of $2.4 million in debt service.

First, the village is using a one-time cash allocation of $4 million out of the municipal facilities and equipment fund for capital projects that are not related to water and storm utility projects. This creates a one-year gap in borrowing. Second, the water utility and storm utility will have 20-year borrowing instead of the traditional 10-year borrowing.

"This $4 million in cash is key in helping to get the village through the next few years," Director of Financial Services Jason Kaczmarek said. "One-time use of cash really sets us up to be able to resume annual borrowings again in 2014 and beyond."

Historically, general capital projects are funded with general obligation debt and are supported by the tax levy. To maintain tax rates, the village has a goal of maintaining $2.4 million on the debt levy, which is about what is planned for 2013.

"It's important to note that over the next couple of years we are near that $2.4 million threshold, so because we are near that threshold this is an opportune time for us to use cash out of the municipal utilities fund," Kaczmarek said. "The great benefits is that will allow for us to continue the capital improvements, continue to work on the roads without increasing the levy for debt service and, equally important, is it's going to provide us a necessary one-year gap in debt that is going to allow us to meet the long-term financing goals."

Plan will help keep levy flat

This financial plan, he said, allows the village to continue to keep tax rates flat, which the village has historically done. Kaczmarek also conducted an analysis on the municipal facilities and equipment fund, which concluded the financial plan is feasible.

"With cash flow, we can do the revolving vehicle replacement and we can also fund these projects with cash to create that one-year gap," Village Manager Mark Fitzgerald said. "We do not intend to pay ourselves back relative to the circumstance. When we use the cash this year, from (fund) 605, that would be a one time out, there would be no reimbursement. That makes the system work as well."

The funding formula projects that the village could have $22 million in cash by 2029 as a result of creating that one-year gap in borrowing.

"With this concept, we will have a continuing increase of available cash on hand, at the same of being able to meet our needs without any drastic increase in levy," said Village Trustee Michael McDonald, commending the work of staff for putting the village in this situation.