/ Articles / Boulder Junction looking at a big bill

Boulder Junction looking at a big bill

Its two year, $5 million road plan complete, now there’s a bill for nearly another $1 million

November 08, 2019 by Brian Jopek

In September 2017, residents of the town of Boulder Junction voted, during a special meeting of the electors, for a road plan costing no more than $5 million. 

There had been extensive committee work to get the effort to repair and/or reconstruct most of the town’s 93 miles of roads to that point.

Even after that approval was given, by a margin of not quite 20 votes, the town’s road committee has met regularly over the course of the project, which was completed this year. 

The financing firm Baird Investments was brought on board to take care of that $5 million and make sure the contractor was paid as needed for the project’s duration. 

Town chairman Dennis Reuss explained at a special town board meeting Tuesday there were different changes that came up from time to time in the project.

Those changes ultimately led to more than $5 million authorized by voters to spend on the project. 

To the tune of nearly $1 million. 

According to a spread sheet handed out by Boulder Junction town supervisor Laura Bertch at the meeting Tuesday, that total number is nearly $977,000. 

Town budget shortfalls

The discussion about the road project overage had been immediately preceded by another discussion about structural deficits in the town’s 2016 through 2019 budgets that were caused by what town officials referred to as an “under calculated” tax levy.

Both Bertch and supervisor Jim Galloway were elected this year’s spring election and not involved in the budgeting process. 

Referring to figures presented from the 2016 to 2019 time frame, Galloway said while budgeting for those years, the town board “has chosen not to tax the people of the town $533,215 over a three year period.”

“That was a choice that was made,” he said. “The minutes of the budget workshops don’t indicate why the choice was made. I’m sure there are reasons.”

Galloway said no one likes taxes. 

“I don’t like to pay taxes, but we have infrastructure to maintain,” he said. “We have equipment to buy. We have roads to construct and repair and I don’t think we can continue to tie our hands in doing that. I don’t think we should continue a trend of purchasing equipment with borrowed money.”

If the town board budgeted the proper amount allowed by the state of Wisconsin, Galloway said, there would be revenue available to do what was needed. 

He mentioned a loan of $154,000 to pay for a new plow truck. 

“We shorted ourselves $259,641 on the levy worksheet,” Galloway said. “We’ve established that pattern and we’ve established a pattern of borrowing to make up for that. It just doesn’t make sense to me. I’m sorry.”

“Well, it’s got to be corrected, then,” Reuss, town chairman throughout that 2016-2019 time frame, said. “Which we’re in the process of doing.”

“We have it corrected for this year,” Galloway said. 

“We’ve corrected it, but transparency’s important,” Bertch said. “And that’s why we’re bringing it up so everybody knows.”

Galloway said that structural deficit of nearly $260,000 he mentioned a couple minutes before would still need to be dealt with. 

“We have five hundred and thirty some thousand dollars in payments to make on two hundred and some thousand dollars income,” Bertch said. 

Galloway said the part he didn’t understand was the town’s full debt service was budgeted. 

“The expenses known,” he said. “But the levy adjustment was far less than what the debt service was.”

“So, that means that the bill was paid,” former town chairman Jeff Long said.

“Yes,” Galloway responded. 

“But the money was taken from some source that nobody can identify,” Long continued. “For a town to move money, it must do a budget amendment ... that was never done. So, we don’t know what budget items got shorted by the actions.”

“No,” Bertch said.

Reuss remained quiet. 

“At the beginning of 2019, as a budget adjustment for the 2018 budget, there was a little more than $400,000 moved in a number of resolutions from various funds to other funds,” Galloway said. “But there was no explanation given for any of those on the resolution itself or in the minutes. It’s just kind of ... it’s just unclear how this was done.”

There have been two budget amendment resolutions approved by the town board since Galloway and Bertch were elected, which addressed the town’s payout to former town clerk Kendra Moraczewski. 

“The explanation was given in the resolution,” Galloway said. 

“There should have been more detail given in the resolutions for the budget amendments,” Reuss said. 

“It’s actually required there be more detail in the resolutions for budget amendments,” Galloway said. 

Not offering any type of explanation for why the resolutions for previous budget amendments lacked the required information during his time as town chairman, Reuss made a simple statement. 

“Decisions that were made can probably be corrected and improved,” he said. “Correct?”

“That’s our goal,” Bertch said. 

“We hope,” Reuss said. “Which this board has started.”

“That’s our commitment we made to the people when we ran for this office,” Galloway said. “It’s not a hope. It’s a commitment.”

“We just wanted to all be able to talk about it so we’re all on the same page with a possible budget deficit,” Bertch said. 

Town clerk/treasurer Dan Driscoll, also elected with Galloway and Bertch this past spring, said he felt was done previously with the budget amendments was “proper by law.”

“These were decisions that were made, but we don’t know the logic,” he said. “It may not be what we like in our current situation. It’s great to look at things in hindsight, but I also think it’s fair to say that was done was done properly.”

Reuss said, in referring primarily to the financing for the road project, everything had been checked out by R.W. Baird others. 

“There was a lot of people involved,” he said. 

“There was a big project going on these last few years,” Driscoll said of the road two year road program. “There was bond money, there was grant money that can be applied and kind of cover up that lack of collection for our debt levy.”

Even so, he said, as town, Boulder Junction is still “pretty well off.”

Aggregate project cost

During the road project shortfall discussion, Bertch outlined a plan for taking care of unpaid bills related to project. 

As of Wednesday, the town had used $4,857,643.52 of the $5 million approved by voters. 

With the nearly million dollars in unpaid bills, the total for the project is listed at $5,834,450.43, well over what voters approved in September 2017.

Included in what the town can use to pay that bill, Bertch said, is nearly $500,000 in money market assets.

Through other actions and budget amendments, including one for just over $31,000 from funds set aside for a police department that hasn’t existed now for a few years and borrowing from the town’s room tax fund, that nearly million dollar overage can be paid. 

Then, Bertch showed how the town would, essentially, pay itself back over the course of the next few years, again using budget amendments going into 2023. 

“The issue is the road project was budgeted for $5 million,” Galloway said at one point in the discussion. “And it’s significantly over that now.”

Reuss then showed some misunderstanding of the situation.

“The road budget was over $5 million,” he said. “We borrowed $5 million.”

Galloway disagreed.

“The road project passed by resolution said ‘Not to exceed $5 million,’” he said. 

“Borrowing,” Reuss told him. 

Both Galloway and Long told him “No.”

“I want to try and do it to where we can get this resolved prior to the electors meeting,” Long said. 

The town’s budget hearing and electors meeting to vote on the 2020 budget is Nov. 14. 

Long maintained the resolution voted on by electors was not to exceed $5 million. 

He referred to October 2017, road committee minutes in which what the committee intended to present to voters at the Nov. 16, 2017, budget hearing was being finalized.

“‘Our goal will be to be much lower than this number with grants, etc.,’” he read. “This is the number it will not exceed.”

Long then referred to the resolution itself voted on at the budget hearing that authorized the town board “to undertake a road improvement project with an aggregate project cost of not to exceed $5 million.”

He said that was presented four more times to the town board after that and that whatever grants were awarded should have been subtracted from the $5 million. 

Long said during an Aug. 14, 2019 special town board meeting, he reminded the town board the $5 million road plan was to have that aggregate project cost not to exceed $5 million. 

“Aggregate’s definition is ‘A total of all those items,’” he said, adding he also urged the town board to do what the town of Manitowish Waters did when bids for the town’s new fire station came in over what voters there had authorized.

“They went back to the voters and had the voters approve the increase,” Long said. “From everything I’ve researched, that’s the only way you can exceed a rock hard limit like that.”

Consequently, he said, now the town doesn’t have the funds to pay the bills it’s received. 

“There is no logic in the fact that we would have a cap of $5 million plus anything we want to spend,” Long said. “That just ... that doesn’t make sense to have something like that. There was a cap.”

He then, using power point information presented to voters by road committee member Greg Van Grinsven in November 2017, referred to the earlier conversation about the town budget and shortfalls there.

“‘Just to be clear,’” Long read from the power point copy, “‘should this project be approved tonight, the actual debt cost, the principal and interest, for the selected bond rate and term, will be added to the town’s budget in the fall of 2018 for the calculation of the actual mill rate and tax levy for the 2019 budget.’ Nowhere does it say ‘We’re only gonna add half of it.’”

Long said it also doesn’t say where funds would come from. 

“State law says everything has to be for a line category and budget category,” he said. “Any change from that requires a budget amendment stating why and how. None of that has happened and we have a significant shortfall here that ... I would like to be able to understand it and show me where this was changed.”

Long said he’s read “every minute” of every road committee meeting and town board meeting conducted since November 2017. 

“Nowhere was there an increase in the road project,” he said. “Nowhere.”

Once everything was voted on and approved, Long said, it didn’t happen. 

“It just did not happen,” he said. 

Long said by his calculations, there’s a difference actually of $1.5 million between what was voted on in November 2017, and what people will told. 

He said he’d accept a correction to his assessment and do so “happily.”

“But it has to be done using minutes to a meeting that was properly agended and properly acted upon,” Long said. “Not just something that was pulled out of the air some place. This is very, very important for this community.”

Reuss said he’d take responsibility for what happened and assured everyone the committee — and town board at the time — wanted to get the best possible job done for Boulder Junction residents. 

The town board was to meet today to further discuss Bertch’s plan for payment of the unpaid bills related to the road project and possibly act on budget amendments to that effect. 

Brian Jopek may be reached via email at [email protected]

Read This Next

{{ item.published_at | unix_to_date }}

{{ tag | uppercase}},

{{ item.title }}

{{ item.description | truncate(200) }}

See more latest news »

Stay Connected to the Northwoods

Learn what a subscription to the Lakeland Times offers you:

Subscribe Today »