Resolution allows city to reimburse itself for potential 2014 capital projects, including the pool, with borrowed money
By Kellen Olshefski
Editor
Members of Elkhorn’s city council voted unanimously in favor Monday night of a resolution allowing the city to borrow up to $5.5 million to reimburse itself for potential capital projects occurring prior to September 2014.
The resolution does not express any commitment, or intent, to borrow any money at this point in time, though would allow the city to do so if needed.
According to City Administrator Sam Tapson, this resolution relates to the Sunset Pool project, as the city expects to borrow a sum of money to complete the installation of the new swimming facility. Tapson said opening up the borrowing to $5.5 million would allow for the city to not only cover the cost of the Sunset Pool – which borrowing for has been set at a maximum of $3.5 million – but also any projects outside the pool, such as city street improvements.
As the actual borrowing of the money isn’t set to occur until later this year, Tapson said with the city knowing it’s going to incur costs prior to then, such as engineering fees for the pool project, this resolution allows the city to use current funds to cover costs until actual borrowing occurs.
“It doesn’t commit you to borrow $5.5 million, it doesn’t commit you to borrow anything,” he told the council. “What it does permit you to do, is reimburse yourself if you borrow.”
The $5.5 million accounts for $3.5 million for the pool, according to Tapson, with an additional $2 million the council may, or may not, choose to borrow to cover additional capital improvement projects.
Unsure of what the city wants to do in terms of capital projects in 2014, Tapson said it’s a discussion the city needs to hold with no specific streets listed.
“There are a number of things that need to be solidified,” he said. “I simply picked a $2 million opportunity, if we needed it.”
With the possibilities of the Market Street land acquisition, improvements to Lincoln Street, park improvements, as well as a number of other unresolved capital projects, Tapson said with a list of projects listed as possibilities under a proposed $7.5 million borrowing package last year, the city needs to decide what projects it’s going to do.
Alderman Jim D’Alessandro raised the question of whether or not the city would be limited at the $5.5 million by this decision. Tapson said the council could choose to go to $7.5 million if it desired, simply going with an intent to borrow that amount.
“This is not an intent to borrow as much as an intent to reimburse from borrowing,” he said.
Council President Brian Olson said he feels the additional $2 million is conservative rather than a “money grab situation.”
Following a question from Alderman Scott McClory, Tapson explained the council will likely, at some point, be doing a resolution of intent to borrow, a “back door referendum,” as he referred to it, meaning by petition, citizens could require a referendum.
McClory expressed concerns that by currently setting it at $5.5 million, if a few months down the line the city needed an additional $100,000, they would be returning for an additional reimbursement resolution.
“In my opinion, we committed to our constituents that we would be spending up to $7.5 million,” he said.
Alderman Gary Payson, Sr., noted the council never committed to spending $7.5 million, but said that it could spend up to that amount.
“That’s our credit limit on the credit card,” he said.
McClory said that no one ever said city streets, many in desperate need of attention, wouldn’t be touched in 2014 because the city was purchasing a pool.
“If we’re going to spend $3.5 million on the pool…there’s a balance of some amount of millions of dollars for all these other streets that we’ve been talking about for years that are in terrible, terrible shape,” he said.
Tapson said while the city could go to $7.5 million with the resolution, the intent is to be sure that after paying MSA, the engineering firm in charge of design services for the pool, which the city has already began paying for, the city can pay itself back for these services from borrowed money.
Tapson agreed with Alderman James Boardman, who said, “What you’re saying, is that we’ll probably never put the $5.5 million out of our coffers before we get the loan.”
Olson said it gives the city an opportunity to take care of other items, such as Market Street.
“Even if we don’t decide to do the street, but we want to acquire land possibly, we’d have access to do that and make sure we do it the right way out of the borrowing, and get paid back,” he said.
The resolution passed unanimously and will be available for public inspection at the Municipal Clerk’s office within 30 days of the approval.
