County adopts plan with its 2013 budgetDouglas County adopted a plan Tuesday night to address longstanding issues along with its 2013 budget.
By: Shelley Nelson, Superior Telegram
Douglas County adopted a plan Tuesday night to address longstanding issues along with its 2013 budget.
In 2013, Douglas County will borrow money to pay its 20-plus year debt to the Wisconsin Retirement System. And in 2015, the county will begin borrowing to tackle county highway projects.
Early next year, the county plans to borrow about $6.1 million at a lower interest rate than the pension fund collects now to end a debt assessed against the county in 1989 to pay for improved pension benefits for county employees approved by the state legislature more than two decades ago.
Then, the county carried one of the weightiest pension liabilities after being assessed for employees the county no longer had. While Douglas County had shed ambulance services and nursing homes, greatly reducing the workforce eligible to benefit from the pension fund.
A decade ago, the liability was on a trajectory to become as costly as the Government Center, but when lobbying efforts failed to net an adjustment, county officials decided to stop the bleeding by paying the interest plus a little more.
If the county did nothing, the debt would increase to just less than $19 million in 20 years, said County Administrator Andy Lisak. If the county continues to do what it’s doing now, he said, the county would still owe $2 million in 20 years.
However, by taking out a loan through the state land trust, the county in 20 years will have paid the entire debt, Lisak said.
The most recent interest rate the county was paying for the pension liability was 7.2 percent. It was originally assessed at 8 percent.
While supervisors still have to approve the actual load, they approved the concept of clearing up the longstanding debt.
County officials plan to pay off the balance owed to the Wisconsin Retirement System in early 2013. The first payment against the loan wouldn’t be due until 2014.
The board also accepted a plan to begin addressing county highways by borrowing for repairs starting in 2015. In 2015, the county would borrow $4 million, and $2 million in the subsequent to years to pay for repairs to the county highway system.
Supervisor Dave Conley said with the poor condition of many county highways, he wished the county could start borrowing money for that sooner.
However taxpayer’s countywide will see an increase in their taxes this year after the board approved a 1.6 percent increase in the county tax levy. The majority of that extra $241,000 the county will collect next year is for bridge and library aid, costs paid by rural towns and villages solely.
Almost $82,000 of that increase will go to paying for debt and about $69,000 comes from new construction in the county.
Very little of the increase actually goes to operating expenses for the county, Lisak said.