Morrison gets creative to find money for vehicles

April 13—MORRISON — In a year in which the largest capital project in the city's history will be completed, it's not surprising that capital expenses would weigh heavily on the fiscal 2017-2018 budget.

The new sewer plant should be finished by fall, and although the price tag has dropped substantially from initial estimates, $16 million is a huge expenditure for a town of fewer than 5,000 residents.

“We were originally approved for a $23 million loan for this, but it played out better than we thought,” City Administrator Barry Dykhuizen said.

Dykhuizen said each phase of the plant's construction came in below estimates, thanks to healthy competition for the bids. The city also learned that the Environmental Protection Agency will forgive 15 percent of the principal on its sewer plant loan, and additional breaks are on the table.

“EPA is still talking about waiving additional principal, and we're hoping they give us a 30-year payment option rather than the 20 years we have now to spread it out,” Dykhuizen said.

In addition to the sewer plant, other pressing capital needs were addressed. Extensive work done on Winfield Street will add about $270,000 to the capital budget. The city also decided to stop kicking the can down the road on its aging fleet of public safety and street maintenance vehicles.

The city found a creative way to work all of the high-priority capital needs into the budget and still carve out an overall surplus.

In a more than $10 million projected budget, the capital expenses are more than the entire operating budget. The budget, which will go to the council for a vote April 24, is $132,097 in the black.

To find money for the more than 20-year-old vehicles, the city decided to refinance two bonds that were issued in 2008 and 2010 for the city's sports complex.

“We were able to combine the bonds and refinance them at a lower interest rate by extending the payments for 5 years,” Mayor Everett Pannier said. “Over the first 6 years, it will give us about $800,000 for capital needs without raising property taxes.”

The bond refinancing cuts the annual payments in half — from $300,000 to $150,000, and will extend the payoff date from 2029 to 2035. The city instituted a utility fee 25 years ago, and that money has been used to make bond payments.

The most expensive vehicle in the budget is a 2-year-old streetsweeper that will cost $210,000 — a new one came in at $265,000. The city has also budgeted for a dump truck, three public works trucks, and a squad car for the police department.

“We've been approved by the council for up to a $500,000 loan for the vehicles, so that will put us pretty close to that amount,” Dykhuizen said.

Dykhuizen said there shouldn't be any changes to the budget between now and the April 24 meeting.

BUDGET BREAKDOWN

Important numbers in Morrison's estimated budget for fiscal year 2017-2018:

Total revenues — $10,326,491

Total expenses — $10,194,394

Surplus — $132,097

Operating budget — $4,457,170

Capital budget — $5,737,224

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