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City approves possible borrowing

The Hudson City Council has taken steps to get around property tax limits on local governments that could be imposed as part of the 2005-7 state budget.

At its June 20 meeting, the City Council authorized borrowing slightly more than $12 million to fund possible building and street construction, parking improvements, park development and heavy equipment purchases in case levy limits favored by Republican legislators become law.

The state budget adopted by the Republican-controlled Legislature would tie municipalities' tax levy increases to the amount of new construction in their communities for the next three years. Municipalities would have to go to the voters for approval to exceed their levy limit. Annual new construction is averaging about 2.6 percent statewide.

Democratic Gov. Jim Doyle is considering whether to veto all or parts of the budget adopted by the state Legislature.

The resolution approved last month by a unanimous vote of the Hudson City Council authorized issuing bonds to fund possible projects and purchases in 2007-9. The city already has issued general obligation bonds to finance $2.5 million worth of projects and equipment purchases in 2005-6.

City Finance Officer Betty Caruso said the council needed to authorize the bonding before July 1 to avoid any limits on borrowing that might be included in the new state budget. She said borrowing approved before July 1 wouldn't fall under the limits.

Caruso and other city officials were quick to point out that authorizing the borrowing didn't commit the city to the projects. "It doesn't mean you have to spend that money," she said.

She noted that the council would still have to approve individual projects and purchases, and vote on whether to issue bonds to finance them. "This gives us the option to bond for future projects," she said.

Possible 2007-9 spending identified by the city staff includes $450,000 for street improvements, $360,000 for sidewalks, $5 million for land and buildings, $1 million for heavy equipment, $4.5 million for parking improvements and $750,000 for parks.

The two major expenditures identified - $5 million for new fire department and ambulance facilities and $4.5 million for a parking ramp - are clearly speculative.

Also, park improvements are paid for through impact fees charged to developers, and home and business owners pay much of the cost of installing and replacing sidewalks next to their properties.

Caruso said the city might be prevented from going ahead with projects that are funded by sources other than property taxes, even, if levy limits are adopted by the state. That could include tax increment districts that use tax revenue resulting from infrastructure improvements to pay for the improvements, officials indicated.

Randy Hanson can be reached at

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.

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