The City ticked another box off their list of tasks to make the future public safety building a reality at the common council’s May 19 meeting.
The council approved two resolutions for debt issuances. The first allowed for the sale of $7,810,000 in tax-exempt general obligation bonds.
“A portion of this borrowing will pay for the public safety building, net of the various grants that are available. It will be used to finance various equipment and street projects and refund two loans at the bank that were issued in 2023 to pay for a fire truck and a dump truck,” said Kristin Hanson, director of the PFM Financial Advisors Milwaukee office.
Funds from the borrowing can only be used for projects stated in the resolution when the borrowing is authorized by the council.
According to City Administrator Chad Abram, the borrowing is structured to be paid off in 20 years.
The bonds are scheduled to be offered at a public sale on Tuesday, June 9, with the bids coming back to the council for approval at a special meeting later that day. The City expects to receive the funds on June 30.
This past Thursday, the City had a ratings call with Moody’s Investment Service. On June 1, the rating is expected to be released, and the official statement will be made available to underwriters.
A city’s debt limit is equal to five percent of its equalized value. Prairie du Chien has a debt limit of approximately $29 million. Hanson said the City had “just over” $7.1 million before the borrowing (approximately 25 percent of the limit).
“With the issuance of the [both sets of] 2026 notes, you will still be under the statutory debt limit,” she said.
According to Hanson, the City will use capitalized interest to offset payments to the debt in 2027 and 2028, and in the two years following that, the City will make use of other funds to help mitigate the debt’s effect on its tax levy.
City Clerk Tina Fuller said the “other funds” are money that has been allocated to a debt reserve fund the city maintains. “We’re preparing for the 2029–30 year... We can use those funds to offset it so that we don’t add a ton of money to the tax levy.”
Abram said the tax-exempt borrowing is “structured to wrap around the City’s existing debt.” He added that the intent is to keep the tax levy under $1.2 million.
The council also accepted an $800,000 grant for the public safety building from the Wisconsin Department of Administration.
The grant was part of nearly $250 million approved for local infrastructure projects across the state.
“Back in October, there was an opportunity to apply for some grant money in addition to our federal money that we are receiving, so I applied,” said City Planner Nate Gilberts.
The money was awarded through the Non-State Grant Program, which gives money to local governments and nonprofits for projects. In the current state budget, it allocates $50 million to 71 local projects. The Wisconsin State Building Commission approved the money earlier this month.
“Our program has been a tremendous asset to local communities since we created it in the 2023-25 budget, and it’s great to see this funding receive support from the commission so we can get these funds out the door to ensure our communities continue to grow and thrive,” said Wisconsin Governor Tony Evers in a statement released this past week.
TID 8
The other borrowing is $1.37 million to be used for refinancing taxable notes that were issued in 2021 to pay for infrastructure, site redevelopment and developer incentives in the city’s Tax Incremental District 8 (TID 8).
“Because you are paying a private developer out of the proceeds of the 2021 anticipation notes, they were taxable, so they have to be refinanced with taxable promissory notes,” said Hanson. “Now that you have development occurring in TID 8, you have revenues that you will be able to pay debt-service payments on these new taxable notes with.”
Abram said the taxable notes also have a 20-year repayment schedule.
TIDs are areas where the city makes financial investments to develop the land for commercial and residential developers and use future tax revenue generated by the TID to pay off the cost and strengthen the municipality’s tax base.
Gilberts added that TIDs are a way for municipalities to provide incentives that attract developers to build in their area. Incentives can include reduced land costs, improvements to public infrastructure (such as water and sewer) and financing options to help alleviate project expenses.
TID 8 is a district created in 2021 within the city that includes Prairie Bluffs Court, Eco Cottages and the Pelton Apartment Complex. Several businesses, including Pizza Ranch and Mississippi Meats operate in TID 8, as do several residential buildings.
Payments on the taxable notes will be paid for by revenues generated by properties within the TID.
In attendance were alderpersons Nick Crary, Vicki Waller, Bob Granzow, Nate Bremmer, Jaaren Riebe, Todd Crotty, Kayla Ingham and Andy Ringgold. Also present were Mayor Mark Gillitzer, City Administrator Chad Abram, Gilberts and Fuller.
The next meeting is scheduled for June 3.
