There’s a time for every purpose in city government. A time to collect, a time to spend; a time to save and a time to borrow. Because the $600,000 to $700,000 that the city receives every year from the state’s transportation fund is spent on operating expenses, and not on the repairing of roads as intended, it is again a time to borrow money to fix the roads. You may have wondered why and how the city can spend the state transportation fund on operating expenses instead of repairing roads. There is an overlapping area between what can be called an operating expense and a transportation related expense (namely the street department costs), so the city effectively uses the state’s $700,000 in transportation deposits to fund the street department, and then borrows money to repair the roads.
It’s apparently legal, or ‘the Don’ Dan Draper, city attorney, would have advised the city council that this financial game was not legal. The commingling of these funds has gone on for over a decade. Although the state’s transportation fund, and charges against it, are required by law to be kept in separate accounts, Lake Geneva city officials and city auditors have ignored the law, even when pointed out to them by city activists. Neither the county nor the state seem to care enough to see that the law is enforced. So, the city continues to put the transportation fund into the city’s general fund, and then spends the state’s transportation fund on operating expenses. It then borrows money to do road repairs along with other capital projects. This borrowing will increase the city debt by about three million bucks, but if cleverly done won’t increase property taxes. It’ll simply extend the existing million-dollar-a-year debt service payment surcharge, which is about 20% of the city’s portion of the current property taxes, for an additional three to four years. Then in about three years it will be time to borrow more, and again extend the debt service payments another three or four years, as has been done for the last ten years. Without this revolving debt service charge being added to the city property tax, the city’s portion of property taxes would be about 20% lower.
Like any addiction, the city and each department always wants more because the current collections fall short, and borrowing this money is a symptom of an addiction to spending. Borrowing should be for major building projects or investments, and not crack-filling or normal maintenance, repair or replacement of items that wear out. This constant borrowing for no justifiable reason is similar to all those people who get caught in revolving pay day lender contracts, and it is just as outrageously stupid.
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