Governments incur long-term bonding debt to cover capital improvement projects. The Town is no different, except we have a much lower total debt in comparison to town assets than other governments.
Bond A- Fire Station #1 located in the City of Middleton + Road Improvements
The Town contributes about 25% of the cost for our fire department services. Our portion of the cost for the Middleton Fire Station was covered by this bond. The costs for this will be fully amortized in 2024. Obviously fire services are an important factor in Public Safety and a necessary obligation of Town government.
Bond B- Fire Station #2 located in the Town of Middleton
The Town bonded for the full amount of the cost to construct Fire Station # 2. We rent this facility to the Fire District to cover the cost of the bond. We are responsible for our 25 % share of the cost through our yearly contribution to the Fire District. The cost will be fully amortized in 2029. Having a Fire Station in the Town is an Public Safety asset and an obligation of Town government.
Bond C- Town land purchase
A previous Town Board authorized the purchase of land adjoining Pioneer Park to the south. Fire Station #2 is built on a part of this property. The cost will be fully amortized in 2017.
Bond D- Old Sauk and other Roads
We bonded for the re-construction of Old Sauk Road. We took advantage of a Federal Build America Bond program at a very low interest rate and when the project cost came in under budget, we used the balance remaining to upgrade other town roads. The cost will be fully amortized in 2019.
Total Town Bond Debt as of Dec. 31, 2012 is approximately $6.4M. We reduce the principal on our debt by about $700,000 a year for the next 5 years. The outstanding balance on the Fire Station # 2 loan, which is covered by the rent, is about $1.7M of the $6.4 M or about 27% of our total debt. The Town’s debt less Fire Station #2 bond is $4.7M. When Bonds “C’ + ”D” are paid-off, our town tax rate for servicing debt will drop by $160,000/ year in 2018 & $228,000/yr. in 2019. We look forward to reducing your taxes at that time!
The Board anticipates no long term capital projects on the Towns horizon that would require a new bond issue. We are paying down our debt on a consistent and regular basis and we will reap the benefits of this policy in the years to come.
We are all concerned about our governments debt. Dane County has a $100,000.00/day interest payment. Yes, that is correct $100,000.00/ DAY. The Town’s daily interest expense in 2013 is about $600/day, about ½ of 1% of the county interest expense. The Town of Middleton finances are solid. Just ask the financial service community who rated the Town at AA+.
(click on image to enlarge)
(click on image to enlarge)