Terry O’Neill, former Lake Geneva Alderperson, writes in again:
Raising the parking fees in the downtown area is probably not a solution to the city’s financial problems. It is merely a band aid to be slapped on to the underlying problem of spending money in so many wrong areas. Even if an acceptable parking increase can be found for the downtown area, it would be only a temporary fix to the city’s spending problem. Having tapped out almost all of its revenue sources, the city is looking for another large pot of gold. And there sits the potential of the Resort Area Tax (RAT), like a big fat Faberge Egg. The approval for that is very unlikely, given that there’s almost nothing in it for the other communities around the lake that would have to sign off on it.
However, regardless of whether it is approved or not, increasing revenue to solve the city’s financial spending problem is like adding another support column to a house infested with termites. No amount of support will ever solve a problem unless the underlining cause is addressed. Over spending is not a new problem for Lake Geneva. It is an addiction that has gone unchecked for many years. To feed its spending problem the city, under the previous city administrator Dennis Jordan, was very creative at sucking money out of every possible source and fund that it could get its hands on since 2005. Over that period the city has depleted most of the 9 million in the unreserved funds, 2 million from the Lake Front & Parking meter fund, and an addition 5 million in revenue previously delegated for the repair and maintenance of the Riviera & lakefront, 3 million from the sewer fund, 15 million from TIF #4. And as if that weren’t enough, the city also borrowed and spent another 6 million in a revolving debt scheme.
Depleting the city’s funds, borrowing, and the extravagant use of TIF funds has enabled the city to spend an extra 40 million dollars beyond normal city revenue during this 12-year period. Now that the last of the windfall profits from TIF #4 are being used in 2017, and the other sources of revenue are exhausted, except raising parking meter rates that were already doubled a couple of years ago, the city council will have to focus on borrowing. The residents’ complaint is that the city’s infrastructure was neglected during those years of extravagant spending, so several million will have to be borrowed to repair the city’s neglected infrastructures (i.e. sewer, water and roads). The city council has no other option, but borrowing money transfers the paying of the debt on to resident’s property taxes, or sewer and water bills. However, borrowing does not address the underlying spending problem that caused the problems the city faces today, but rather enables excessive spending to continue.
The city’s limit on borrowing is currently about 50 million dollars which could sustain the City’s over spending for the next ten years. Although Wisconsin has virtually frozen all city rate hikes on property taxes (not assessment increases), debt payment is automatically added to property taxes, which is currently about 1 million a year and as the city’s debt is increases, the increase in the debt payment will be automatically added to property taxes. The state limits a city debt to 5% of the total assessed property value of the city, which currently limits Lake Geneva’s maximum borrowing to around 50 million, which the City Council can do without any resident approvals.
Cartoon of week from Terry O’Neill
Featured Photo: The third Sunday of Advent and the third Advent tree put up by the Geneva Shore Report shines bright through a coat of heavy snow and with a full moon in the background. Merry Christmas!