(Beaver Dam) City officials in Beaver Dam may be revisiting their debt policy to adjust annually for inflation. In 2010, city officials voluntarily adopted an ordinance that limits borrowing for capital projects and infrastructure improvements at $1.6-million dollars. Alderman Ken Anderson requested the item be placed on this week’s Administrative Committee meeting agenda, noting that the debt cap has not changed since its adoption.
City Finance Director John Somers outlined three options. If the city were to have tied yearly adjustments to the Consumer Price Index, the cap would be at $1.83-million dollars today. If the cap had been adjusted in conjunction with increases in the tax levy as measured by new construction, the cap today would be $1.76-million. If it were tied to the state’s Expenditure Restraint Program – which is a combination of new construction and the CPI – the cap today would be $1.95-million. Somers recommends tying the annual debt cap adjustments to the Expenditure Restraint Program, and Anderson agrees.
Anderson would also like to see a resolution brought forward that would require approval through voter referendum to exceed the revenue cap. The current policy requires three-fourths majority support of the council. Alderman Dave Hanson says that could put the city “behind the eight ball in lining up funding” and the city could wind up with higher bids or no bids. Somers says that the referendum idea was considered when the original 2010 resolution was discussed but it was decided that it would add too much time to the process so the three-fourths majority requirement was added instead. Anderson says the city would have to adjust its timeline for borrowing. No action on the debt policy was taken this week in committee and the matter is expected to be brought back for discussion next month.