The Prescott City Council meeting on Monday, Jan. 23 touched on some topics that will shape the city’s financial future for years to come.

After separate presentations by Ehlers Public Finance Advisors, the council voted to seek a full water rate study from the Wisconsin Public Service Commission and will move forward with borrowing to rebuild Elm, Locust and Washington streets.

The council in November voted for staff to do a cash flow analysis on water rates. The city last year approved asking for a simplified rate increase with the PSC of 4.5 percent, but a full rate study hasn’t been conducted for Prescott since 1997.

As part of the analysis, city staff put together a list of capital projects on the books for the next 10 years. The projects, including water utility work for street projects, would require borrowing of $1.2 million.

The study shows that the average residential user water bill would increase about 37 percent, or $100 per year for water usage.

Brian Roemer of Ehlers said that even at that level Prescott’s rates “are still on the lower end of 80 percent of utility bills in the area.”

The PSC process of reviewing Prescott’s data and setting new rates will take about eight months. Once the rate case is started, the city has to accept the PSC rate findings.

Council members expressed the opinion that there’s no other option but to ask for the PSC study.

“I don’t like it,” said Bailey Ruona, who ran the meeting in the absence of Mayor Rob Daugherty. “It’s too bad the last time we looked at it was 1997.”

“We kicked it down the road long enough,” said Pat Knox.

City Administrator Matt Wolf commented, “We need to seriously take a look at our water funding. This is a long-term issue that isn’t going to go away.”

Borrowing resolution

The council vote to move forward with borrowing $4.73 million at an interest rate of between 3.5 – 4.5 percent for the Elm/Locust/ Washington streets rebuild was 5-1, with Alderperson Thomas Oss in opposition.

Oss made a motion at the onset of the discussion to wait a year or two for the project because of economic uncertainty. At the Jan. 9 meeting, Oss was the lone alderperson opposed to paying off an existing bond issue that has an interest rate of 2.2 percent to take on debt at a higher interest rate.

Oss asked Sean Lentz of Ehlers, “Retirement of debt at 2 percent and replacing it with debt at 4-5 percent, is it normal procedure to advise clients to do something like that?”

Lentz explained that the city had reserve fund balance available to pay off the older debt issue. In doing so, with taking on the debt for the street projects to be done over the next two years, it will keep the debt retirement portion of the property tax bill stable.

“So, you don’t necessarily advise your clients to do something like that?” Oss asked.

“Without any other issues, no, we do not,” said Lentz.

In making the motion to wait on the borrowing and road projects, Oss said, “Kick the can down the road for one to two years and reassess it at that point … Move it down one-two years to reconsider and maybe find stability in some greatly volatile times economically. I know nobody wants to do that.”

He termed the debt payments as “onerous.”

Alderperson Maureen Otwell responded, “I don’t think it’s onerous at the moment. It will not do any more than we’re already doing. We took a year off three or four years ago of doing street projects. We all know the biggest problem in the city are streets. That’s what we hear most about.”

Lentz projected that the debt service portion of the tax levy will remain steady for the next seven years, including with a proposed purchase of a new fire truck in the $1 million range in 2027.

Comprehensive plan amendment

The council approved a first reading of an amendment to the city’s Comprehensive Plan that sets a new north-south roadway that would run from 570th Avenue on the south to Highway 10 on the north. The road would be developed at 1242nd Street, and it would only be built if developers were to annex property into the city and want to develop it.

The property is all located in Oak Grove Townships, and several town residents spoke in opposition to it at a public hearing at the Jan. 3 plan commission meeting.

The original north-south corridor in the Comprehensive Plan was north from 570th Avenue on what is now Sea Wing Boulevard. Great Rivers Subdivision developers told the city last year that if the road is built there, it would restrict future phases of the subdivision. More importantly, building the road in that location would have required a 1,000-foot-long bridge over a ravine that would have pushed the price of the road north of $11 million.

A second reading of the Comprehensive Plan change will take place at the Feb. 13 council meeting.