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Finance committee recommends $8–$10 million borrowing and phased debt-levy increases to cover committed projects
Summary
Franklin City finance committee recommended the common council consider borrowing $8–$10 million to pay for recently committed capital projects and to add $130,000 to the levy-limit worksheet as a phased restoration of unused debt-service levy; committee members favored a longer amortization to reduce annual tax impact.
The Franklin City Finance Committee voted June 23 to recommend that the Common Council consider issuing $8 million to $10 million in debt to pay for capital projects that staff said are already committed and to include an additional $130,000 in the 2027 levy-limit worksheet to begin restoring unused debt-service capacity.
The recommendation grew out of a multi-hour budget briefing that laid out state levy-limit rules, the city’s net-new-construction allowance, and the effect of recent wage commitments for the police department. Paul Ratzenberg, a former city finance director who advised the committee, said the practical choice is between raising the debt-service levy now or cutting services later. “When you take on debt… you are agreeing to raise the levy necessary to pay that debt,” Ratzenberg said, arguing the committee could add a portion of the unused debt-service levy now and spread the remainder over the next two years to smooth tax impacts.
Staff told the committee the 2027 budget will be squeezed by limited allowable operating levy growth tied to new construction, while personnel costs — including a committed 4% police wage increase — are among the largest budget drivers. The committee examined three amortization scenarios (10, 15 and 20 years); Ratzenberg and staff recommended a longer schedule (20 years) to reduce the immediate annual levy effect, while noting total financing cost is higher over the life of the loan.
The motion that the committee forwarded to the council asked staff to present borrowing options in the $8–$10 million range and to include an additional $130,000 in the levy-limit worksheet (described as roughly one-third of the city’s unused prior debt-service levy) so a portion of the debt-service levy is restored for operating relief. The recommendation passed by voice vote; no member present voiced opposition.
What happens next: Danielle (finance staff) will present detailed borrowing scenarios to the Common Council, including the alternative amortizations and estimated annual debt-service impacts translated to average tax-bill changes. The committee asked for clear, concise “cliff notes” for council members and the public that show the percent impact on an average tax bill under each borrowing and amortization option.
The committee emphasized these are recommendations to the council; final decisions about borrowing amounts, amortization terms and whether to use fund balance or other sources remain for the Common Council to approve.
