Altoona faces historical yet secure debt

Thursday, July 28, 2016
Abigail Hantke | WEAU

ALTOONA, Wis. (WEAU)- An area city is facing historical debt amongst rapid growth in development and population, and is looking at ways to financially support all of its growth.

Altoona City leaders voted tonight to approve the bidding process to borrow $7 million in promissory notes, or bonds.

That money would go toward supporting capital improvements, like street projects and the River Prairie development.

"I think what we see in Altoona is a city that's going through a rapid growth phase," said Sean Lentz, a Senior Municipal Advisor with Ehlers, who has been working with the city for years. "What you tend to see is the infrastructure to support that growth does drive the debt up, so it is a little higher than it has been in the past certainly."

"This year it includes debts for the River Prairie, that's $5.4 million, and then its general obligations, general funds, street projects, equipment, and the sewer utility that end up being projects or equipment, and water and storm," listed Tina Nelson, the Finance Director for the City of Altoona.

And although the city is looking to borrow $7 million, you won't have to worry about your taxes going up.

The new bonds will bring Altoona's total outstanding debt to $21.2 million.

But they say it's an investment that will ultimately pay for itself.

Land that used to sit empty, will soon be filled with major businesses,

"On the flip side, the way the debt is set to be repaid is quite rapid, so I would say in a couple years from now, it's going to be back down to much more reasonable level at that time," said Lentz.

Down the road, city officials say they're hoping to provide tax relief for community members once phase three of the River Prairie District is completed around the year 2022.

"This is a large loan," added Nelson. "Last year, there was a larger loan for River Prairie on phase two, it was $8.3 million. This one is hopefully the last large one, mainly being that River Prairie, its phase three and the final phase of River Prairie."

The River Prairie District has even generated enough cash flow to lower the original amount borrowed from $8 million down to $7 million.

The City of Altoona will be taking bids locally and nationally on August 25th and will present them to the city council at that night's meeting.

Lentz adds this is a very secure debt and the city has great rating (AA-) to help them get a lower interest rate from bidders.

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