As budget talks continue, Elkader Council forced to make unpopular choices

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By Willis Patenaude, Times-Register


As budget talks continued at the latest Elkader City Council meeting, one thing remained clear: hard, difficult choices were needed in an effort to “pull the reins back a little tighter,” as council member Randy Henning put it. 


Some of those hard choices are putting off certain projects, like repairing the shelter house roof at an estimated $15,000. Construction of bathrooms at Founders Park at an estimate of $26,500 would replace the porta potties being used at a cost of about $4,000 a year. There was also a request to resurface the concrete floors in the bathhouse at the pool, at a cost of $12,000. This would replace the plastic mats that need routine washing by pool staff. 


When it comes to the shelter house roof, city administrator Jennifer Cowsert was adamant the budget is not the reason for the delay. The roof is currently showing no signs of leakage and is checked routinely, but it’s also one of the projects council member Deb Schmidt believes can be put on hold, given how thin the budget is being spread. 


“To me, it’s all part of the puzzle and the shelter house will get its attention in due time…I believe Randy’s statement is correct and by holding off a year or two, in some cases, projects that can be on hold and setting aside budget dollars, this does help build our banking account,” Schmidt said. 


Concerning the other two issues, Schmidt’s take followed a similar line of reasoning. She called these projects “luxury projects.” They on a “watch list,” but are “not yet needed,” though she offered support for them. 


However, other council members, including Henning and Tony Hauber, were less supportive, at least in regard to resurfacing the bathhouses, concluding that it’s a regular part of maintenance and the job. 


By all accounts, the council as a whole accepted putting the above projects on hold for the time being, as the city works itself out of the budgetary clamps of recent projects, namely Carter Street and the Keystone Bridge. Council member Peggy Lane argued for a “go slow” approach.


This approach is in response to the rising costs of necessary items, such as employee health insurance, which saw an increase as a whole of around 1.2 percent, and a 16.5 percent increase in property/liability insurance. Add in the fact that the general fund only has a $9,000 surplus, which Cowsert admitted was on the “low side” and something “council has been trying to increase.”


But setbacks in the major projects, like Keystone Bridge, means the city will need to borrow more money and the amount the city owes in loans to banks is quite substantial. Across a total of six projects, the current balance on those loans is close to $6.7 million, with the earliest one being paid off in 2025, though two extend into 2030 and two more won’t be paid off until 2041. 


The impact of these loans is felt with an increase in property taxes, which will be 3.76 percent over last year, according to Cowsert. She also maintained the necessity of it and believes “a lot of residents understand we need to continue to repair and improve infrastructure.” 


While there are several projects ongoing, the meeting was highlighted by discussions around the existing loans for the water and sewer projects, which make up about a third of the outstanding loan balance. Those projects, which were mandated by the DNR and as a result of a lawsuit brought by the Sierra Club, led to a decision which the council acknowledged would be an “unpopular” one. Members chose to raise water and sewer rates, with water going up 47 cents and sewer increasing by 55 cents. Combined, the increased rates are expected to generate close to $9,000, which will be used to pay down the negative balance of $53,000 on water loan. 


On the issue of popularity, Schmidt asked, “When are we going to quit being unpopular?” Hauber suggested to “just tell them that it was my idea.” Lane added to the conversation, stating, “as long as our water and sewer rates are what they are, people are unhappy. But we don’t have a choice.” 


Hauber went on to argue that not increasing rates would be “trading popularity now, for no money in the future.” The reality of the situation necessitates the rate increase to pay off the accumulated negative balance. 


Mayor Josh Pope agreed with the rate increase, stating simply, “I think we need to.” 


“We’re not always going to be popular. We have to do what’s best, and if we keep digging ourselves in a hole, it just takes us more to get out of it,” Schmidt said at the meeting. 


In a separate email exchange, Schmidt added, “No one wants to raise any rates/taxes, but I do feel our community would be the first to help and understand, as these rates have been put upon us as a community from many years past of catching up…and this council should not be worried about who likes us in order to keep our town running. We won’t always be liked. I also think the community put us on this council because they saw something in each of us and know we will try always to do the very best we can as a majority.” 


Another increase debated by the council was the 5 percent salary increase for city employees, which came in below the 8.7 percent cost of living increase. It was justified due to the health insurance plans provided to those employees, which compares favorably with neighboring cities, according to Cowsert and the council. 


“I think, when you combine our health insurance, a 5 percent increase is pretty close,” Cowsert said. 


Lane and Henning agreed that health insurance needed to be factored into the increase. Lane said, “I’m happy with the 5 percent currently,” and Henning brought up the aforementioned health insurance increase. 


One council member questioned the increase, arguing that the city has a “very good base of employees” that it wants to keep. Speaking on the matter in an email, Schmidt said, “I do support paying our city workers the money that is deserved. Saying no to a raise for people that work hard to keep our community thriving isn’t an option in my eyes.” 


Remaining council members, including Lane, Hauber and Eric Grau, as well as mayor Pope, were reached for further comment, but did not respond to that request. 


However, Cowsert added in a separate exchange that there has thus far been no “negative feedback” about the 5 percent. “When we give raises, we have to make sure they are sustainable for the long term. In reviewing the department budgets, we received wages too. If a department head does not think the current wages are competitive, then we work on that,” Cowsert said. 


As the budget talks continue, rates increase and projects add up, Cowsert noted there are few revenue generating options for rural communities. 


Schmidt, who remains in “review on the budget,” stated, “we must keep looking at future needs to stay ahead of any unexpected problems and costs. Elkader is a small town with little revenue but with bigger city costs.”

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