Fear of debt puts roadwork at risk

By Joe Lanane

The ax hanging above New Berlin’s roster of 2011 road projects will fall unless city officials buy the argument that this is the ideal time to take on debt.

The New Berlin Board of Public Works approved $9.5 million for projects in 2011, an increase of 27 percent from the city’s 2010 capital improvements budget. But the city would borrow $9 million, and spend the next 10 years repaying that debt.

That represents nearly $5 million more than what New Berlin normally borrows, said Mayor Jack Chiovatero, which is why he said he is recommending postponing road projects. He said he would leave it up to the Common Council to decide what projects take priority.

“We have a road infrastructure we need to maintain,” Chiovatero said, “but at the same time we have to stay within our means.”

Increasing the city’s debt may not be ideal, Alderman Ted Wysocki said, but delaying roadwork also costs money and stymies development.

“We have the opportunity to borrow money at the lowest rates we have or ever will see, and we’re in the best position to get some really good deals on contracts,” he said. “It’s truly an investment that, if done properly, will provide a greater return we can enjoy in future operational budgets.”

City Engineer J.P. Walker said all of the projects are necessary, but $2.7 million worth of road rehabilitation is most essential. He said projects using grant money, such as those on 124th Street and Martin Road, also have a better chance at approval.

Chiovatero said it would be difficult to turn down those types of projects, but even work covered partially by grants can strain an already stretched city budget.

“I think everybody understands there’s a problem here, and we’ll have to take a look at it,” Chiovatero said. “Do we bite the bullet, take the grant and build the road, or ignore the grant and have to build the road at a much higher cost down the road?”

Walker said West Coffee Road and the city center intersection are at the bottom of the 2011 list of road projects.

Chiovatero said he expects the Common Council to select next year’s road projects sometime between December and mid-January.

During more than two decades working with the city, New Berlin Treasurer Ralph Chipman said, he only rarely has heard of the council reconsidering a capital improvement budget already approved by committee. The concern this year, he said, is other city services would be cut to pay back the borrowed money.

“That’s when you get into the balancing act of determining how much you can afford while still maintaining your streets,” Chipman said. “Maybe it’s getting closer scrutiny because if we’re not going to be able to raise taxes, then something else has got to give.”

But Wysocki said there will be no need to raise taxes to accommodate construction or to repay debt from those projects. He said the roadwork will boost property values enough to repay the money. This year, the city’s value rose more than 1 percent, and, Wysocki said, there should be another .5 percent increase in 2011.

“We’ve analyzed this thing up to the point of paralysis,” he said. “We’ve planned to work, and now it’s time to work the plan.”