The city has authorized the sale of $2.5 million in debt in 2019 for three major projects, about one-fourth of what it borrowed last year.
Mayor Luke Diaz and some alders have talked openly and repeatedly over the past year about reducing debt. Much of the difference between the 2019 and 2018 debt issuance has been that 2018 contained the last part of a multiyear, multijurisdictional project rebuilding County Hwy. M and a deal with the Verona Area School District involving a $4.5 million contribution to infrastructure around the school.
This year’s general obligation bonds, which came in at what financial adviser Ehlers labeled a true interest rate of 2.058 percent over 15 years, were for a new ladder truck and equipment for the fire department, street improvement projects and the design of the public works facility.
Bonding in 2017 was $8.4 million, and in 2016 it was $8.6 million. Each of those years contained outlays of several million dollars for the M project, the bike and pedestrian plan and downtown street and streetscape upgrades.
The city also reduced its debt load for annual street maintenance by close to a million dollars each year starting with 2018, when the Epic tax-increment finance district closed.
The city’s bond rating of AA2 was the same as it has been for many years. Ald. Evan Touchett (Dist. 4) asked Ehlers representative Todd Taves whether the city could improve that rating and whether it would be worth it.
“Continued growth in tax base and moderation of your debt” is how, Taves said to the first part of the question.
To the second part, he did not encourage going all-out to improve the city’s bond rating to aa1, such as Fitchburg has, because it’s “not a huge dollar amount.” Instead, he said, continuing to follow sound financial policies eventually will lead to an upgrade.
He noted one mark against Verona is the high concentration of tax base from a single taxpayer, Epic.