City approves refinancing after mayor vetoes original vote due to new information
By Kellen Olshefski
Editor
The City of Elkhorn Common Council voted in favor Monday night of refinancing city debt that includes an option for future councils to maintain the current levy, using the additional money as they choose.
The council originally voted in favor of the option at its last meeting, though Mayor Brian Olson vetoed the vote so aldermen could review new options that had become available since that meeting.
The council had several options before them Monday night including doing nothing, which Olson said was not a favorable option in terms of saving the city money, a full refunding, a limited refunding and a partial refunding.
Olson said Monday night the city was facing a philosophical decision as a partial or limited refunding would leave an opportunity for the council, beginning in 2021, to maintain the current tax levy “forever, if so chosen,” at a cost of $100,000.
“I’m personally not comfortable with handing over $680,000 without any intent,” Olson said. “I would prefer to see it go back to the taxpayer at some point.”
Understanding that operating costs do go up, Olson said it’s the reason he asked Dave Ehlers of Ehlers Financial Advisory Services to look into a limited refunding, which would maintain some money for the city while also taking some of the burden off of taxpayers.
City Administrator Sam Tapson said Monday night the City’s best opportunity for tax reduction would be the partial plus. Tapson said this would leave the city with about an additional $300,000 in 2022 for operations or other means and also allow for a tax levy reduction, assuming the climate is the same as today.
“Things change quite a bit, and they have,” Alderman James D’Alessandro said.
“So, we’re $22 million in debt and we can afford to spend $100,000 on something that six years may or may not happen,” he said. “I think we need to send a message to our taxpayers that we’re looking out for your money here. $100,000 is a lot of money, it’s just a gamble for the future.”
Gary Payson, Sr., made the motion to override the veto, seconded by Tom Myrin. Aldermen Myrin, Payson, Scott McClory, Hoss Rehberg and Gregory Huss voted in favor. Alderman James D’Alessandro voted in opposition.
Following Monday’s meeting, Olson said via phone with the council’s decision, whoever is on the council in 2021 would have an additional $680,000 to spend each year.
“Barring no difference in operations and/or climate, your tax bill would remain the same,” he said.
Olson said a limited refinance, the option that came up which drove him to veto, would have lowered the levy about $380,000 in 2021, while also allowing for that city government to have access to about an additional $300,000.
“That was my compromise,” he said. “My veto wasn’t done in malice, it was done to provide another option. Don’t give these guys $687,000, give them $300,000 and give the rest back to the people.”
As the law as written now in regards to levy limits, the partial which the city passed, according to Olson, would allow for an additional $687,000 for the government forever, if so chosen.
“What I advocated for was to pay the debt off and at the end of the debt $687,000 per year, forever, if the laws stay the same, would drop and result in actual tax cuts,” he said.
“So, we passed on an option to save taxpayers real money, we passed on an option to have an end result of debt-reduction and instead, the council voted to continue the rates as they are and left a package of $687,000 in levy limits, tax dollars, for the sitting council to do whatever they want beginning in 2021,” he said. “What they just guaranteed you, in 2021, they just created an infinity of where we’re at today.”
“I advocated for lower taxes. We put a lot of strain on folks with capital projects and I’m looking for ways for debt reduction…if you’re not advocating to find ways to reduce taxes, I’m not doing my job, and this was one of those ways.”
