Two Rivers staff present multi-year capital needs as council weighs tying $2 million cap to property values

At a Two Rivers city council work session on Monday, staff presented a multi-year capital investment forecast and asked the council whether to keep the city's long-standing $2.0 million annual capital spending practice or tie the annual benchmark to the city's equalized assessed value.

City staff said the presentation was intended as a short extension toward a formal five-year capital improvement program and invited council discussion rather than a formal vote. "We're not trying to scare anybody," said Kyle, a city staff member leading the presentation, adding the goal was to give the council an "accurate assessment of the state of Two Rivers and the state of the departments." Kyle said staff will return a resolution on the 2007 self-imposed debt cap and provide options for indexing the capital target.

Why it matters: staff framed the question as one of values and long-term planning. The city operates under two limits: the state statutory debt ceiling for municipalities (described in staff remarks as 5 percent of equalized assessed value) and a 2007 self-imposed cap set at 60 percent of that state limit (about 3 percent of equalized assessed value). Staff said the city's general obligation debt is about $18.7 million and that roughly 98 percent of that debt will be repaid within 10 years. At the same time, the city's equalized assessed value recently passed $1 billion, which increases borrowing capacity under both limits.

Staff presented two choices: maintain the status quo annual capital practice around $2.0 million, which staff called a conservative approach that would keep debt low but risk deferred maintenance; or adopt a flexible, indexed approach that links annual capital borrowing to a regularly updated benchmark such as equalized assessed value. "Standing still is over time moving backwards," Kyle said when summarizing the trade-offs between fiscal conservatism and flexibility.

Departments identified near-term capital priorities and rough cost ranges:

- Public works: sidewalk replacements (city pays for sidewalks affected by terrace trees under current practice), many arterial resurfacing projects, curb and crosswalk work, a multi-year lead service line replacement program, aging traffic-signal cabinets and equipment replacements. Public works staff estimated a subtotal of about $5.9 million for highlighted multi-year projects and warned that deferred maintenance can lead to higher emergency-repair costs.

- Parks and recreation: renovation of the Sugar Beach concession/restroom (city investment targeted near $200,000 plus $250,000 in grant fundraising), Riverside Park reconfiguration and skate-park work supported partly by Wisconsin DNR grants, playground replacements (Lakeshore Park flagged as highest priority), and a proposed cemetery maintenance/shop expansion.

- Police and public safety: squad-camera and interview-recording systems purchased in 2019 will need replacement within several years; portable radios purchased in 2016 are out of support; tasers and some equipment are out of support or near end-of-life. Staff noted staggered replacement schedules and grant opportunities for some items.

- Fire and EMS: a replacement fire truck already in the CFP was estimated at roughly $1.1'$1.2 million if purchased now; turnout gear replacement cycles and ambulance lifecycle options were discussed (remount vs. new chassis); staff said a recent grant reduced radio costs and that defibrillator replacements may be partly grant-funded.

- Utilities and technology: the electric utility plans a 2026 meter program and bucket-truck replacements; water utility staff warned of a recurring sand/intake issue and zebra-mussel concerns, DNR-mandated reservoir work, membrane and chlorine-system replacement cycles, and a multi-year lead-service-line replacement program estimated at roughly 150 services per year under current plans. IT staff described PC and server replacement cycles and a phone system that will reach end-of-life in 2029, with cloud or hybrid replacement options.

- Library and facilities: the library requested window replacements, HVAC work, parking expansion possibilities and an aspirational auditorium expansion estimated at roughly $750,000; staff also noted a need for AV upgrades and ongoing maintenance.

Council discussion and next steps: several council members expressed concern about the timing and potential tax implications. Council member Mark Bittner and others discussed benchmarking the capital limit to a third-party figure such as equalized assessed value, which would let the annual target rise and fall with the local property market. Council did not vote on any change to the capital practice. Kyle said he would bring a resolution to reaffirm the 2007 self-imposed debt policy at a future meeting and present indexed alternatives for council consideration.

The session also included a facilities note: staff reported structural concerns in the municipal parking-deck basement and proposed about $70,000 for engineering and design to define scope and future construction needs. After the presentation council members went to inspect the basement.

No formal policy or borrowing decision was made during the work session; staff will return with a draft resolution and specific indexing options for council action.