(Beaver Dam) City officials in Beaver Dam are considering a change in their debt cap policy. In 2010, the council set limits for annual borrowing at $1.6-millon dollars, unless three-fourths of the council votes to exceed that number, which is eleven of 14 alderpersons.
Two years ago, the council agreed to adjust the cap for inflation, bringing the 2021 limit to just over $1.7-million dollars. The Capital Improvements Plan in recent years has been well above the self-imposed maximum, with next year’s borrowing proposed at nearly $6-million dollars.
Consensus among the committee was that a debt cap policy has value. Alderman Mick Fischer suggested a cap of $3.5-million dollars.
City Finance Director Zak Bloom was asked his opinion and suggested that the policy also incorporate metrics that are used by Moody’s Financial services in setting the city’s bond rating, like debt capacity.
With next year’s projected borrowing, Beaver Dam would be at 40-percent of its available $65.3-million dollars in debt capacity, which translates to another $39-million dollars in available borrowing.
The policy change cannot be updated in time to impact the 2021 borrowing plan. The committee directed Bloom to bring back a draft resolution after the current budget is adopted next month.