After months of discussion, the Medina Town Board was given some preliminary numbers on what the taxpayer impact could be for a new town hall/garage located at 5536 Missouri Road by Justin Fischer of Baird. The financial advisor presented the information at the July 14 board meeting.
According to the figures Fischer presented, the taxpayers could see up to a $1.51 per $1,000 of valuation increase on their property taxes depending on the amount of the loan, the loan provider, the number of years and interest rate.
“You have options and a good range of options,” he said.
Fischer’s figures took into an account a borrowing amount of $2.5 million and $3 million; a 15-year State Trust Fund Loan (STFL) at 4% interest; a 20-year STFL at 4% interest; and a 20-year private bank loan at 3.5% interest. The STFL rates were based on the rates it offered as of June 23.
The financial advisor did point out while the town has worked with private banks in the past for loans, there is no guarantee a bank would provide a loan of that amount. However, he noted the town would be eligible for the STFL, overseen by the Wisconsin Board of Commissioners of Public Lands; Fischer said the town would be able to get one of those loans without any issues.
The $2.5 million and $3 million figures were just estimates, as the overall cost to build a new facility could come in higher, lower or somewhere in between the two examples, the Baird representative explained.
According to Town Chairman Todd Weinberger, Devin Flanigan of Keller & Associates, who has been working with Medina on the proposed project, said the cost for a new town hall/garage could fall between $2.4-$2.8 million.
The highest mill rate for borrowing either amount would be a 15-year $3 million STFL with an estimated 4% interest rate of $1.51 per $1,000 of property value. If the town needs to borrow $2.5 million, the same number of years to pay back the loan at the same interest rate would drop to $1.21 per $1,000.
Fischer said if the town would have a 20-year STFL loan at 4% interest, the mill rate impact for $3 million would be $1.16 per $1,000; if the town needed to borrow $2.5 million, for the same number of years at the same interest rate, the maximum mill rate impact would be 95-cents per $1,000 of valuation.
The lowest mill rate impact in both situations would be a 20-year bank loan at the rate of 3.5% with 75-cents per $1,000 for a $2.5 million borrowing and 97-cents per $1,000 for borrowing $3 million.
However, Fischer said a bank would likely not allow for a 20-year loan; instead, it would be possible for the bank to offer a 10-year loan and the town would need to refinance that loan for an additional decade.
“Essentially, your payments would be on a 20-year structure, but you don’t know what that interest rate is going to be after year 10,” he said. “So there is a bit of risk you take with that option but at the same point (the rates) should be more competitive than the State Trust Fund Loan program.”
It was noted the mill rate impact for this loan would be on top of all the other taxing jurisdictions, plus existing town debt, impacting how much residents pay in their yearly property taxes.
From Fischer’s perspective, based on the type of project, the town should go forward with a 20-year loan.
Later in the meeting, Town Supervisor Phillip Braithwaite said community members might want to know how the overall cost for the project could be decreased.
“People are saying it doesn’t need to be fancy,” said Supervisor Sue Zingsheim.
Weinberger said the board has done its due diligence on the proposed facilities project and it is time to put it before the residents and offer an opportunity for them to ask questions.
The board will host a question and answer session regarding the new town hall Wednesday, July 28 at 6 p.m. at the current town hall, 634 Highway 19. No official town board action will be taken at the open house; it will merely be informational.