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Audited finances show healthy general fund balance for city of Prairie du Chien

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By Correne Martin

Prairie du Chien’s government leaders were informed about the city’s 2017 audited financial statements, thanks to highlights presented by Brent Nelson, of Johnson Block and Company, at Tuesday night’s council meeting. Overall, the general fund balance is healthy, he said. 

Nelson made several recommendations to the council based on the status of the general, reserves and TIF funds.

“The general fund decreased by $107,000. Revenue exceeded expenses and was more than budgeted. The biggest component of that was the library campaign fund,” the certified accountant explained. 

He said outstanding general obligation debt (bonds backed by city credit and taxing power) equaled $3,450,000 for the year, of which about $2 million was for the library project. That brings the city’s total general obligation debt to $10,901,000. 

The $3.45 million was part of the biggest city function, in terms of expenses in 2017 as, Nelson said, overall debt service reached $4,161,000. That includes general fund debt service (cash required to cover repayment of interest and principal for the year). The second largest area of cost comes from public safety measures, including police and fire, while the third largest was transportation. The council was reminded that a taxi cab and skidsteer were purchased last year.

The city’s 2017 budget ended with 23 percent made up from unassigned expenditures, despite the fact that it’s the city’s own policy not to exceed 20 percent. This increase prompted Alderman Edward Hayes-Hall to question whether the city is “overspending.”

“I don’t see a systemic overspending problem,” Nelson said, reassuring him that “a good portion of the reserves ($445,000) was used up in 2017 due to retirements and departures. But the city had built up its reserves prior.” However, he later suggested the city consider assigning part of its general fund balance toward rebuilding its reserves for future compensation requirements. 

A final point Nelson made was that one of its tax increment finance districts, TIF 6, is winding down and is mandated to expire Sept. 16, 2019. This district is the city’s biggest, also known as the Cabela’s TIF district. He said the city needs to discuss its plans for closing it. This could include placing these tax dollars back on the tax roll, which would distribute them among city, school and county taxpayers in 2020. Or the city could choose to extend TIF 6 another year in exchange for affordable housing stock. Once TIF 6 officially closes, the city could invest in opening another TIF if so desired.

Water/wastewater reports

Both the city’s consumer confidence water report and wastewater treatment facility compliance maintenance report for 2017 are in and are available online at cityofpdc.com, at city hall and the library. Water Superintendent Larry Gates said this is the first year the report is not required to be published in the newspaper, saving the city money. 

 

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What is a TIF?

According to a 2015 Courier Press report about the city’s TIFs, a TIF district is a piece of valuable, vacant property within a city or village that the local government can use to attract new business, invest in infrastructure or rebuild blighted areas­—which can also create and retain jobs, increase property values and provide development opportunities without increasing taxes. In the beginning, the city of Prairie du Chien, for instance, borrows money to start the TIF district, which must be approved by the state. Those initial funds are routinely used toward start-up water, sewer and street costs.

Property taxes generated by the incremental increase in value of the TIF district are available for projects, such as street improvements, demolition or more redevelopment. But there is a catch: the money must be used within that same TIF district, it can be transferred to another TIF district that’s in trouble financially or it can be used within one half-mile of a TIF district.

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