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Splitting up borrowing will save city money
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MONROE - The city of Monroe expects to save an estimated $365,000 in interest payments by agreeing to split funds borrowed for capital projects and equipment between 2016 and 2017.

Originally, the Monroe Common Council decided to borrow the total $14.225 million for high priority projects, including tearing down the municipal parking ramp and reconstruction of 8th Street. Upon recommendation of its financial advisors Ehlers and Associates, council members revised its borrowing methods.

On Tuesday, Ehlers Senior Municipal Advisor Greg Johnson presented to the council three resolutions for the aldermen to consider regarding bonding, borrowing for a period of 11 to 20 years, and notes, which allows for debt service to be paid back within a decade. Instead of borrowing $9.8 million in bonds, the city removed a costly project, the reconstruction of 8th Street from 6th Avenue West to Wisconsin 69. That project alone has an estimated $5 million cost. The council approved the remaining projects for a total of $4.715 million in bonds. They also approved $4.41 million in notes.

Johnson said to save money in interest payments, numbers could be cut. The city would be able to retain more than $360,000 in interest if the bonds were bank-qualified. In order for the borrowing to be designated as such, the total amount the city took on in debt had to be less than $10 million. That way the bank issuing the funds would get a more favorable tax benefit and the borrower would be given a lower interest rate, he said.

Of the roughly $9.124 million approved to borrow, just over $6.459 million will fund equipment and projects. The remaining $2.665 million will repay debt taken on to fund Tax Increment District 5 and 6.

Alderman Michael Boyce said he felt the priority projects were important, and voted to fund them, but that council needed to better prioritize saving for the future.

"This vote tonight just allows us to maintain the status quo when it comes to our budget process," Boyce said. "Priority-based budgeting will allow us to look at project plans and equipment requests objectively."

Payment for the large overhaul of 8th Street will be borrowed in early 2017, before the project is slated to begin. Other street improvements along 11th Street from Wis. 69 to 13th Avenue and along 21st Street from Wis. 69 to 4th Avenue West were approved for a total of $400,000.

Playground equipment upgrades, pool improvements and replacement of water and sewer lines throughout the city will be paid for through the approved borrowing this year.

City Administrator Phil Rath said if the council did not agree to fund the next round of borrowing, the construction project along 8th Street could be delayed. He added the measure should be included in the not-yet-drafted 2017 budget.