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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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Peshtigo Will Establish A Capital Improvement Fund

The City of Peshtigo's Finance committee decided unanimously on Tuesday, Jan. 24 to recommend establishing a Capital Improvement Fund by transferring $650,000 from the unassigned fund balance to the new account. Department heads will be asked to submit a list of capital improvement needs to their committees and establish priorities, after which the list will go to the Finance Committee and then the full City Council.

Committee Chair Tom Gryzwa stressed that even after the fund and the Capital Improvement list are in place, nothing can be spent from it without separate approval of the parent committee, the Finance Committee and then the full City Council.

Gryzwa explained at the start of the discussion that the city currently has $1,755,000 in unassigned funds. The auditors recommend keeping that balance at $875,000 to $950,000. Gryzwa said he had talked with auditors and they recommended putting part of the unassigned balance into a fund for major expense purchases and capital improvements. His suggestion, which was accepted by the committee, was to start the fund with $650,000.

He said he has been told repeatedly by representatives of grant agencies that if they hope to apply successfully for grants they need to pull that money from unassigned reserves and put it into the special fund. If it turns out to be needed for something else, that can be done, he added.

He repeated that even if the Capital Improvement list is approved, it doesn't mean the item will actually be purchased or the work will be done. That needs to go through the whole process again, individually, from department head to parent committee to Finance Committee and then to the council. He said everyone needs to know that just because the funds are there doesn't mean it can be, "grab and spend."

"Are we going to have a running wish list?" asked Alderman Brigitte Schmidt.

"It's a needs list, not a wish list," countered Public Works Director George Cowell, who has been telling City Council for months, perhaps years, that his equipment keeps getting older and isn't being replaced on any sort of schedule.

Cowell wondered how he would know if his department's needs would be covered in any given year from the Capital Improvement Fund, and if not, would he need to put them in his budget.

Gryzwa said that is the reason for the procedure. Each committee knows the needs of the department they are responsible for, and then the Finance Committee and the full Council would look at overall needs of city departments versus money available and prioritize on that basis. He said every year the audited balances will be reviewed and in some years they may be able to add money to the Capital Improvement account.

In reviewing account balances and expenditures at the start of the meeting, Deputy Clerk/Treasurer Anita Morois noted there were some large sums taken in and paid out in the past month. She said that was from property taxes being paid, and appropriate amounts distributed to the other taxing entities, including the school district, county, state and NWTC.

Gryzwa noted these are often large amounts. He said in a recent court case a judge ruled that the power plant in Kewaunee County had been over assessed, and ordered the county and all the other entities to return the amounts the court said they had collected improperly, and this amounted to millions.

He said in future years, not only will all the entities need to cut back their budgets to cover the lost tax base, they will need to find the money somewhere to pay back the improperly levied taxes.

"That's what can happen with improper taxes," he declared, stressing the importance of accurate assessed values.

Financial reports showed that as of Wednesday, Jan. 11 the city's Revolving Loan Fund (RLF) had a current cash balance of $202,206, and the Community Development Block Grant (CDBG) Fund had a cash balance of $930,487.30, CDs totaling $1.1 million, and loans outstanding of $1,557,589.

There were balances outstanding of $31,330 to Dave & Wendy Holmes, $146,705 to Vargo Tool & Die, at 2 percent interest; Edgewood Motel/Paulsen for $74,755, at 2.5 percent interest, on RLF loans, all current.

There had been no payments in 2016 on the remaining RLF loan, a $90,000 loan made to Faucett Forest Products in July of 2015 at 3 percent interest. Balance due is $87,847. Gryzwa, who also chairs the CDBG/RLF committee, said the bank is foreclosing on its loan, and the attorney is working with the RLF/CDBG group in attempts to collect on theirs.

A $31,500 CDBG loan, made to Oestreich in 2006 at 6 percent interest, is in default on a balance of $26,408. Gryzwa, said that property was sold at auction last week. "We did bid on it, and it will be in the courts," he said.

An old loan made to Walters has been written off the books, but efforts to collect continue, Gryzwa said.

Payments are current on all the other CDBG loans, on which the balances total $1,531,181, and interest rates are at 2 percent, except for loans at 3 percent interest to Kravis, Inc., and Precision Ice Blast, and a 1 percent interest loan made to the city's sewer utility, which has a balance of $278,297.

The city's loan of $415,698 was paid in full in November of last year, but there will probably soon be another one. Gryzwa said the UDAG Committee had agreed to loan the Sewer Utility $300,000 to pay for the mechanical portion of rehabilitation work on the sludge thickener at the Wastewater Treatment Plant. City Council is expected to approve that loan at its meeting on Tuesday, Feb. 7.

Gryzwa described the loan to the utility as a win/win for everyone, as the 1 percent is more than the interest being paid on the fund's CD, and far less than the 3 percent interest the utility would be charged by a commercial lending institution.

When reviewing regular city bills and collectables there was brief discussion on efforts to collect on three outstanding bills for fire calls. Committee members thought one had been turned over for collection last month. Morois said they talked about that but took no action. Attorney Spangenberg is looking at it, but because the amounts involved are so small they will not be taken to small claims court.

Gryzwa said a collection agency will attempt to collect in return for getting to keep half of what they collect. He said they do give reports on what has been collected. Spangenberg is checking on their contract, and so far it looks good.

There was brief discussion on equipment that needs to be purchased for the police chief's new squad car, such as a radio and computer. This was overlooked at budget time, and there was no contingency fund built into the budget so money will need to come from general funds or elsewhere in the budget.

Gryzwa declared that next year every departmental budget should include a contingency fund to cover things like this. This year they did put a $17,000 contingency fund in the 2017 budget to cover added costs expected to result from labor contract negotiations. Morois said the contracts are settled and that money has to stay there for that.

There was discussion on who pays for "Diggers Hotline" costs, and locates for underground utilities. Gryzwa said the city pays monthly to be a member of digger's Hotline, and that payment covers the cost of locates on city rights of way. A separate company, Damage Control, will do locate work on private properties, as well as city property that is not a street right of way, for example at the Wastewater TReatment Plant.

Individual property owners are responsible for expenses involved in locating and digging up sewer/water laterals from the mains to their properties for whatever reason, but they must get a permit to do it. The property owner expense includes restoring the street if it needs to be torn up, so it is important to keep sewer laterals from getting clogged.

Cowell said the city would incur prohibitive liability if they did locate on private property, so they do not do it at all.


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Peshtigo, WI 54157
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