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Don't Put Cost of New Library on the Backs of New Glarus Businesses and Residents

 

February 17, 2022



Dear Editor,

I read with alarm a recent letter to the editor, in which the author outlines supplemental funding options for both the construction and the operation of a new library in New Glarus.

Regarding construction costs, a bit of background is in order. State statute limits the amount of debt a municipality can incur. This cap exists to protect residents and businesses from local governments incurring crippling debt service costs that result in crushing property tax burdens.

The author of the letter suggests that the Village should double the amount of debt it takes on to build a new library, from one million to two million dollars. He also suggests that 80% of this total debt should be obtained via a special class of loan issue through the USDA. That new debt would be exempt from the statutory borrowing limits that protect us against excessive municipal borrowing, and the resulting debt service costs that would be added to your property tax bill.

To be clear, I’m not implying that our Village Board would necessarily run up excessive debt for the library or any other purpose. But the statutory cap on municipal borrowing exists for a good reason – and should not be circumvented on a whim.

Next the author suggests that the Village contribution to library operating costs should be supplemented by skimming profit from New Glarus Utilities (“NGU”) and channeling that new source of revenue specifically to ongoing library operations. He correctly points out that NGU is allowed to, and has, generated profits in the past, and can be expected to do so in the future.

A profit is a lot of things, most importantly a cushion against loss. No business is entirely predictable; expenses can increase unexpectedly, just as revenues can decrease. Profit margins ensure that when the unexpected occurs, the business (in this case NGU) will not be plunged into crisis. But if a profit margin is committed to a specific purpose (such as operating a library), it becomes a depended-upon necessity, rather than a welcomed buffer of safety. In my eight years serving on the New Glarus Village Board (and subsequently), NGU has submitted multiple “rate cases” to the Wisconsin Public Service Commission, requesting to increase utility rates, so it could maintain its modest profit margin. The resulting increased utility costs come out of the pockets of NGU’s customers, typically the residents and businesses of New Glarus. An extra expense is an extra expense, whether you pay it via your utility bill or your property taxes. I’m sorry, but skimming NGU’s profits to operate a library (or for any other purpose) is just reckless.

Village budgets have routinely been tight and challenging over the years, and that’s likely to continue. The only truly viable option for those who wish to see more money spent on the construction and operation of a new library is to exert pressure on the surrounding municipalities (whose residents would also benefit from a new library) to make meaningful contributions to both its construction and operations. To the best of my knowledge, so far only the Township of New Glarus has stepped forward in this regard, and they’ve only offered up a token contribution.

So build and operate a bigger, better library? Yes, of course. Just don’t look for ways to do so entirely on the backs of the businesses and residents of the Village of New Glarus.

Sincerely,

Greg Thoemke,

Village of New Glarus

 
 

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