County Considers Loan For Marinette Project
The City of Marinette's request for $1.5 million from Marinette County to complete financing for their proposed Community Sports and Event Center has met with less than enthusiastic reception from some supervisors on Marinette County Board. After much discussion on Monday, March 20, the Finance Committee voted three to one to send the city's request to the Executive Committee without a recommendation.
Voting in favor of the motion to make no recommendation were committee members Don Pazynski, Janis Porfilio and Don Phillips. Supervisor Vilas Schroeder, committee chair, had supported the funding request and voted against. Supervisor Rick Polzin was absent and excused.
Before the vote, Interim Administrator John LeFebvre had presented a proposal to offer the city a low-interest loan instead of a grant for the project. He explained by his proposal the city would save the $1.5 million in interest, and the county would retain its capital and earn some interest while helping the project become a reality.
The $12 million Civic Center is to be built on property adjacent to Marinette High School. The city has explained plans to offer it for use to all schools and organizations in the county for sports, trade shows, community gatherings.
Marinette Mayor Steve Genisot had brought his proposal for financing the $12 million project to County Board at its meeting in February. He said the City Council had voted unanimously to borrow $6 million for the project, and fund raisers have pledges for contributions totaling $4.5 million from private sources. He asked the county to provide the remaining $1.5 million. He argued that the city generates a large percentage of the county's sales tax proceeds, and said the Civic Center will attract people to the county to spend more money and pay more sales taxes, in addition to improving the quality of life that will help employers attract and retain good personnel.
When he presented his lending proposal to the committee, LeFebvre explained he has been having discussion with the city regarding the $1.5 million, as well as on possible city use of the mostly vacant old law Enforcement Center adjacent to the courthouse.
He said that discussion will be going to the Executive Committee, but he also felt that discussion, plus his proposal for the loan as a possible alternative, also should be discussed by the Finance Committee.
He presented spread sheets showing possible numbers for two loans to the city, one long-term and one short-term. He has been told the city needs $10.6 million to do the construction, and he proposed loaning the entire amount. In that case, the city would not have to go to bonding, and the county's rates could be competitive enough that the city would save $1.5 million.
Supervisor Pazynski, who represents parts of the Town of Peshtigo opposed both the loan and the $1.5 million contribution.
"So you'd loan them the whole $10.6 million?" Pazynski asked.
LeFebvre proposed two loans, one for $6 million for 20 years at 1 percent interest and another for $4.5 million for five years at half a percent interest. He had estimated that interest from commercial sources for the 20 year loan would be three percent and for the five year loan would be 2.25 percent.
Pazynski didn't want to undercut local banks if they planned to be involved in the financing.
LeFebvre said it appears the city would be going through bonding with national financiers. He pointed out in the first year the county would get back $1.3 million of the initial loan amount. In part this would be possible because some of the pledges call for payments over time rather than all up front. He said the city was always looking at short term and long term loans.
"This is just a concept," LeFebvre explained. "This is another way we could assist the city to accomplish this without spending down our funds."
"This is a city responsibility. We are a County Board," declared Pazynski. "We could loan them the $1.5 million," he suggested. He said his constituents are opposed to a county contribution toward the project. He said right now the county's treasury investments are earning 2.6 percent, and repeated his arguments from prior meetings that when the hospital was sold the taxpayers of Marinette County were promised that $14 million would never be touched, but would be kept in perpetuity to reduce property taxes. "As a politician I don't see going against a promise," he declared. He said the county already is doing its part toward improving the quality of life in the city. The county provides the buildings for UW-Marinette and last year paid for repairs to the fieldhouse and the River Cities pool.
"I agree this is a good project," he declared, but urged letting the city get its money elsewhere, and letting the county keep its promise to the taxpayers.
"My constituents are very pro-active," he said. "I'd be walking into a buzz saw if I supported this!" He said one of his constituents does support the contribution.
Schroeder, who also represents parts of the Town of Peshtigo on County Board, disagreed, "We said we'd invest that money and make the best possible use of it," he declared. He said as an average the county makes only .6 of a percent on its investments.
To a question from Pazynski, Finance Director Pat Kass said interest is going up and currently he has made some long term investments at 2 percent.
"Are we in the business of making loans?" asked Porfilio.
Kass said some time ago the county did loan money to Wausaukee Enterprises and Anthony House, agencies that contract with the Health and Human Services Department.
LeFebvre said he realizes the proposed half a percent interest is a poor rate for the county, but said it isn't that much less than the current .6 percent, "and it's also an investment in our community."
County Board Chair Mark Anderson said former Board Chair George Bousley, who is current Mayor of Niagara, had called him on this issue. He said the county did not make a long term commitment not to spend the money from sale of the hospital, but was more concerned about comments made by supervisors that the county does nothing for communities up north, and cited several things that had been done. Also, the city pays about $700,000 a year toward the county Sheriffs Department, but has its own police force and seldom needs the services of county officers. The city also has the Hazmat Team that serves the entire county .
Anderson declared if the state looked at investments in communities as some are looking at this project, the Maritime Center for Excellence wouldn't be under construction in Marinette.
He repeated his contention that the county needs facilities of this sort to attract personnel for the industries that grow the local economy.
As to just loaning the city the $1.5 million in addition to the other bonding, LeFebvre felt that might push them over the borrowing limit.
"The game has changed from a gift of $1.5 million to loan the $10 million and we save our principal," Schroeder declared.
Supervisor Ken Keller said he serves on Marinette City Council and has been on County Board for 20 years, "and I don't think that's a conflict of interest." Hee said what is good for the city, or any of the county communities, is good for the county. "The county has nothing to lose and more to gain from this. This is about our citizens. "Let's make this loan!"
Pazynski was worried they might need the $6 million before the five years are up, for example if they need to build a new jail pod.
Pazynski was more receptive to the loan idea than to the contribution, but said he still had reservations. However, he promised, "I'll study this more....I could change my mind."
Supervisor Phillips suggested moving it to the Executive Committee without a recommendation, and Pazynski seconded.
"That means we're hanging on the fence and don't know which way to jump," Schroeder declared. He favored supporting the loan concept.
In other business, the committee approved several other proposals to help with Economic Development in the county, including backing of a Broadband Expansion Grant application in conjunction with Florence County. They also okayed amending the capital improvement plan for the county to postpone reconstruction work on County W from Crivitz east to Hwy. 64. The County W work in and just west of the Village of Crivitz remains in the plans for the coming construction season as recommended by the Highway Committee.
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