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Peshtigo Finance Committee Okays Several More Purchases

Issue Date: September 30, 2020

At an 8:15 a.m. meeting on Thursday, Sept. 24, Peshtigo City Council's Finance and Claims Committee approved several purchases to be made before the end of the year with Capital Purchase Outlay funds. Committee members present were Aldermen Brigitte Schmidt, Archer Leupp and Chair Debbie Sievert. Alderman Mike Behnke, who is serving as acting mayor during the illness of Mayor Cathi Malke, arrived while the meeting was in progress.

To keep the tax rate as even as possible from year to year, it has been Peshtigo's practice to borrow funds for most capital outlay purposes and then levy 25 cents per $1,000 of equalized value ($222,000) to make the loan payments. Clerk/Treasurer Tammy Kasal explained to the committee that the money borrowed for capital outlay items must be used for that purpose.

Earlier this year the city borrowed $1 million to finance a number of large-ticket items that have been approved by City Council. That loan is to be repaid at $9,818.13 per month for 10 years.

So far, $942,733 has been spent from that loan for items that have been ordered, but have not yet been delivered. That includes a include a new Fire Engine for $463,407, for which $64,298 was taken from the Fire Outlay account and the rest came from loan proceeds. Other purchases from loan proceeds include $230,736 for a Fire Equipment truck, $261,941 for a new automated garbage truck, and $50,987.28 for a crack sealer, for a total of $942,773.23.

This left a $57,226.72 balance, which must be used for Capital outlay items ordered before the end of the year.

Items remaining on Public Works Director George Cowell's needs list included a "tipper" to be mounted on the back of the city's old garbage truck so it can handle the automated refuse bins that will be in use throughout the city by Jan. 1, a new wood chipper, and a crack router to be used with the crack sealer to extend pavement life on city streets.

After some discussion at Thursday's meeting, the committee agreed to recommend purchase of all three items. Cowell said the $25,000 remaining in his department's Capital Outlay account also can be used toward the purchases.

He had advertised for bids for the chipper, and two dealers responded with bids and demonstrations. Cowell said both bids met specs. The committee approved his recommendation to accept the low bid of $65,370 from Vermeer. The other bid had a price of $72,000.

Cowell explained to the committee that he wants to keep the old chipper for another two to three years to deal with a problem he expects to hit the city in the next year or two. He said the Emerald Ash Borer has been detected about 20 miles north, in the area of Hwy. 180 and County JJ in the Town of Wagner, and predicted it will not take long for them to move south to Peshtigo.

Damage caused by the green beetles kills trees quickly, and the type of damage also causes the dead or damaged trees to tip over easily, so once a tree is infected they need to get it down and gone, Cowell said. This will create a greater than normal need for wood chipping. Cowell said the problem will end when the Emerald Ash Borers move, and then he will recommend selling the old chipper.

Alderman Schmidt, who chairs the Parks and Recreation Committee, expressed hope that some of the loan proceeds can go toward park improvements. She noted one of the needs is more wood chips for the playground, and wondered if the chips created by the new wood chipper could be used for park projects.

Cowell and Behnke felt not normally, since the material from street and yard cleanups usually contains too many leaves, twigs, etc. However, Cowell agreed they might be able to turn fallen trees into usable material for the parks by adjusting some of their practices, and said he will find out after the new machine arrives.

The garbage truck lifter will cost about $10,000, and is necessary so the city has a backup for for garbage collection in case the new truck breaks down. Cowell said it is essential to have the new lifter installed and ready for use as backup before the Jan. 1 automation date.

Cowell explained the crack sealer can be used on asphalt pavement with minor cracks, but the router/crack filler can be used with it to extend the life of pavement with more serious cracks. Estimated cost, with the newly required dust control system, is $32,999.

The city also took a short term loan for $132,700, of which $42,430 is being used to purchase a police vehicle and $50,000 for computers and servers, which leaves $40,270 to be spent on other 2020 Capital Outlay items.

Kassal said if there is any capital improvement money left she would love to get new desks and chairs for her office, where the desks now "are all just pieced together," and the drawers and cabinets they use are not handy.

The committee reviewed the UDAG and Revolving Loan Fund reports. There is a total of $177,814.51 out in RLF loans, and all payments are current except a balance of $41,111 .70 owed by Faucett Forest Products, which in August was slated by the Finance committee for a review in six months. The fund has a balance of $386,306.90 available for eligible economic development loans.

The UDAG Loan Fund has a total of $1,594,173.59 that could be borrowed for economic development projects in the city. The account has a total of $1,993,292.24 out in loans, including balances remaining on $625,000 in loans to the city's sewer utility. All payments are up to date.

Behnke reminded committee members that they need to start working on the 2021 budget. Kassal said the major Finance Committee budget meeting should not be held until the other committees work out their budget requests, so they scheduled their budget session to str at 8 a.m. on Tuesday, Nov. 10. The next regular Finance Committee meeting will be at 8:15 a.m. on Wednesday, Oct. 14.


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