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City approves two-year, $2.5 million bond issue

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River Falls,Wisconsin 54022
Hudson Star Observer
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City approves two-year, $2.5 million bond issue
River Falls Wisconsin 2815 Prairie Drive / P.O. Box 25 54022

The Hudson City Council last week authorized soliciting bids for $2,515,000 in general obligation promissory notes that will be used to finance the city's 2005 and 2006 capital improvement projects, vehicle and equipment purchases.

In a related action, the council decided to use special assessments and impact fees it has collected from developers to redeem a total of $3,195,000 in outstanding general obligation notes and bonds issued in 1997, 1998 and 2001.

The net effect will be to reduce city total general fund debt, which at the beginning of 2005 stood at $8,265,000.

The city has been working to reduce its debt over the past several years. City Administrator Devin Willi said that in the four years he's been in Hudson, the total outstanding debt has been reduced by about $1,300,000 per year.

The result has been a decrease in the annual tax levy for debt service, which dropped to $975,000 in 2005. The 2004 debt service levy was $1,112,413.

Under a plan drafted by Ehlers & Associates, the city's financial consultants, the city will have an annual debt levy of approximately $1,000,000 for the years 2006 through 2009. If no new major borrowing is done, the annual debt levy will begin falling off in 2010 and continue declining until all the debt is paid off in 2015.

The past bond issues the City Council voted to redeem bore interest rates ranging from 5.125 percent to 4.2 percent. Ehlers & Associates reported that the rates were some of the highest that the city is paying on its debt.

According to Willi, the council decided to issue promissory notes to cover two years' worth of capital projects and equipment purchases in order to save on the fees charged by the institutions that handle bond issues. Issue-related expenses for the 2005-06 bonding are projected to be $33,500.

There also was concern about how tax levy limits expected to be imposed by the state might affect future capital project financing.

At a March 23 special meeting of the council to decide on 2005 capital projects, financial adviser Steve Apfelbacher of Ehlers & Associates ran through possible scenarios the city might face based on whether the Republican-controlled Legislature's levy limit proposal or Democratic Gov. Jim Doyle's plan is enacted.

Apfelbacher recommended that city officials make a personal visit to the Moody's Investors Service office in Chicago to request that its current bond rating of A2, set in 2002, be upgraded. He said the city is a good candidate to receive a rating upgrade, which would lower the interest cost on the notes it issues.

A breakdown of the city's planned capital projects and equipment and vehicle purchases for 2005 and 2006 is shown on the accompanying chart.

Church property annexed

Also at its April 6 meeting, the City Council gave final approval to First Presbyterian Church's petition that the city annex eight acres on the north side of Vine Street west of Grandview Drive. The congregation plans to build a 10,945-square-foot church with a 164-seat sanctuary on the site. Access to the church, which the congregation hopes to have built before the end of the year, will be from Vine Street.

In a memo to the council, Community Development Director Dennis Darnold said the driveway will be moved farther to the west to accommodate proposed right- and left-turn lanes on Vine Street. A proposed storm pond on the east part of the site would reduce storm water drainage to residential lots east of the church, he said. He said the construction of storm ponds and the church parking lot will require the removal of trees, but many will remain in areas not developed by the church.

City Hall study

The council voted to look into contracting with a management consulting firm to analyze the use of staff and technology at City Hall and suggest improvements.

Mayor Jack Breault brought the issue to the council, saying he had suggested the study at the council's March 23 meeting. Since then, he and Council President Scot O'Malley had met with a consulting firm that City Administrator Devin Willi's brother has an interest in, Breault said.

He said he wanted to notify the council of the relationship between Willi and one of the firm's principals before asking the firm to submit a proposal in case the council had a problem with it.

Willi doesn't have any financial interest in the firm and wouldn't receive any direct or indirect benefit if the city awarded the contract to his brother's firm, he said. Also, Willi's brother wouldn't be involved in the Hudson project, Breault said, and he, not Willi, would be responsible for the administration of the project.

Breault said there weren't many firms that he was aware of that reviewed management and technology processes.

District 4 Alderman Roger Riedel said he did know of another firm that does the work, however, and District 6 Alderwoman Carah Koch said she was concerned the relationship between the Willi brothers could influence the process.

In the end, Riedel moved to look into getting proposals on a staffing and technology study from other firms that might do the work, too. It passed on a unanimous voice vote.

Other matters

In other business at its April 6 meeting, the City Council:


  • Referred a request to rezone the recently annexed Ban Tara LLC property to the Plan Commission. The developers of the 22.6-acre site on Carmichael Road south of Stageline Road are requesting that it be rezoned from a one-family residential district to a general business district. A public hearing on the rezoning request was scheduled for April 18.

  • Referred a request to rezone a 2.72-acre parcel at Stageline Road and Bittersweet Drive to the Plan Commission. Owner George Hoel is asking that the property, which borders the Ban Tara development, also be rezoned from one-family residential district to general business district.

  • Asked the city staff to look into a request by Glen Olson for the city to deed to him a small amount of property east of his house at 631 Front St. Olson's house encroaches on city property that he says has been maintained by his family for many years. He is in the process of selling the house.

  • Approved an application by Diep Ha Inc. for a Class B beer license and Class C wine license for the Happy China Garden Restaurant, 1801 Ward Ave., Suite 240, in the Plaza 94 shopping center. City Clerk Nancy Norvold said the city still has six wine licenses and three beer licenses available

  • Approved using a thermoplastic style of pavement marking and curb delineation to mark the southbound right turn lane from Carmichael Road to Center Drive.

  • Renewed a six-month Class B beer license allowing the Hudson Softball Association to serve beer at the Grandview Park concession building.

  • Approved a temporary Class B beer license allowing the Hudson Boosters club to sell beer in Lakefront Park during the 2005 Booster Days, July 1-3.
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    Randy Hanson
    Randy Hanson has reported for the Star-Observer since 1997. He came to Hudson after 11 years with the Inter-County Leader at Frederic, and eight years of teaching social studies. He’s a graduate of UW-Eau Claire.
    (715) 426-1066