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Alternative sought to road work borrowing

Greenfield to explore options at paying for road improvement and construction costs

April 22, 2014

Greenfield — Going from virtually no debt for roads about a dozen years ago to a debt payment of $3.14 million last year, more than half for roads, Greenfield may look for alternatives for financing its road projects.

Currently, the city borrows for resurfacing and reconstructing roads.

"That's unsustainable for the future," said former alderman Tom Pietrowski who brought the concern to the Common Council before his term ended last week.

Richard Sokol, director of neighborhood services, said that as of Dec. 31, 2013, the city's debt stood at $36.9 million, of which roughly $23 million was for roads. The rest was for the Law Enforcement Center, the library, improvements to a fire station and the Department of Public Works garage, he said.

Until about a dozen years ago, the city paid cash for road projects, Sokol said.

"But that was not getting the job done," he said.

Because the roads were deteriorating, the city changed its policy and approved borrowing. The city has averaged about $3 million per year for road resurfacing and reconstruction, although that fluctuates greatly, Sokol said. For example, this year Greenfield will spend $5 million, the result of good interest rates and having a lot roads that need work, he said.

The money borrowed for roads has been appreciated, Sokol said.

"We've had $23 million in road improvements and they've been pretty well received by residents," he said. Property values sliding because of poor roads have been stabilized and people are investing more in their homes, he said.

"I think people value what we've done," he said.

But Mayor Michael Neitzke was doubtful that an alternative to borrowing could be found.

"We're using every option we have," he said, but the options are extremely limited. "We're looking all the time at cost effectively getting our infrastructure where it needs to be."

Pietrowski said he would like the city to use more of its state transportation aid for roads instead of using so much of it for operational expenses for police, Department of Public Works and other departments.

Sokol said the state expects cities to use transportation aid for these road-related expenses. For example, police have traffic control and accident response expenses, he said. The amount of transportation aid the city receives is based partly on estimates of those kinds of operating costs, he said.

When the aid comes in, he budgets it like any other revenue, Sokol said. Using more transportation money for roads would mean operations funding would be short. Because the state limits how much the city can raise property taxes, the city might not be able to make up an operations shortfall. The revenue caps don't apply to borrowing money.

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