At $25 million, county debt among lowest in Wisconsin

But some supervisors want to tap reserves to reduce amount owed
By 
DAN BENSON
Ozaukee Press staff

Ozaukee County’s debt load is one of the lowest in Wisconsin when measured as a percentage of what the state allows.

The state allows counties and municipalities to borrow up to 5% of the their equalized value.  

For 2019, the equalized value of Ozaukee County is nearly $13 billion, 5% of which would be almost $650 million.

The outstanding current balance of the county’s general obligation debt, however, is just over $25 million. That’s just 3.88% of the amount it is allowed to borrow, county Finance Director Jay McMahon reported this month to supervisors on the county Finance Committee.

That’s one of the lowest percentages in the state.

Among other counties in the area, only Washington and Waukesha have lower percentages, 2.24% and 2.64%, respectively.

Other counties in the region had the following levels of allowable debt in 2018: Sheboygan County, 7.52%; Manitowoc County, 9.01%; Brown County, 9.39%; Fond du Lac County, 14.62%;  Milwaukee County, 18.3% and Racine County, 26.39%.

Despite that low percentage of debt relative to other counties, some supervisors think Ozaukee County should drive it even lower.

“It’s like paying down your mortgage,” Supr. Lew Herro said to the committee. “It’s something all of us want to do.”

Herro suggested debt could be paid from the county’s healthy reserves, which have been bolstered by higher-than-usual interest earnings and sales tax collections.

Currently, the county’s interest earnings are $293,000 over budget estimates for 2019 and projections estimate an additional $443,000 of sales tax revenues adding to the general fund surplus for 2019, County Administrator Jason Dzwinel said. 

“The county also has used reserve to complete projects in 2019 that will impact our year-end surplus,” he said. 

That includes transferring $675,000 from unrestricted fund balance to pay for the Justice Center roof and War Memorial renovation. 

In addition, McMahon and Dzwinel said paying debt down faster is sometimes not possible on some bond issues but that the county has done so at times in the past.

Items for which the county has borrowed, and their remaining balances, include:

• 2011 bonds for the fairgrounds/ice arena project; $3.15 million.

• 2012 bonds for technology upgrades; $735,000.

• 2013 notes for capital improvements; $2.965 million.

• 2014 bonds for Lasata Care Center remodel and update; $8.275 million.

• 2015 bonds for construction of Lasata Crossings, which refunded an earlier debt issue that had a higher interest rate; $6.3 million.

• 2019 notes for second half of radio upgrade project; $3.8 million.

Payments on that debt totaled just over $4 million in 2019, which included pre-paying $430,000 on notes issued in 2010, McMahon said.

That was up from $3.374 million in 2018. The increase was due to debt issued for the second half of the radio upgrade project, McMahon said.

Of the $25.225 million in outstanding debt, $12.21 million or 48.4% will be paid over the next five years, McMahon said.

Dzwinel said it is possible to pay down debt more quickly in 2020.

“The interest rate is 2.4% on that debt issue, which is the lowest of any of our current rates,” Dzwinel said. “Prepayment would save $32,000 annually on principal payments of $750,000 from 2020-2023.” 

Doing so would require a $2 million increase in property taxes to pay off the note and save the interest in 2020, he said.

The fairgrounds debt cannot be prepaid until 2022, he said.

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Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

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