March 21, 2026
VERNON COUNTY, Wis. – Vernon County finds itself in the same difficult spot as many local units of government find themselves in across the state, how to keep up with increasing costs for health insurance, fuel and the cost of road repairs while keeping within state tax levy limits that only increase by a fraction of those costs to operate at the same level as the previous year.
Faced with strict state levy limits the Vernon County Board of Supervisors signed off on another borrowing package to fund capital improvements during their March 19 meeting. This is the second year the county approved a multi million borrowing package that may continue for several more years.
The approval of up to $4.91 million dollars in general obligation promissory notes is part of a multi year strategy to shift major capital expenses out of the county operating budget and into long term debt. County Administrative Coordinator Cassandra Hanan helped develop the plan last year to borrow up to five million dollars annually over the next several years to pay for large items like road repairs and heavy equipment. The strategy shifts those massive capital expenses off the operating tax levy and creates much needed breathing room for the county to fund daily services and operations under strict state revenue caps.
Before the board debated the resolution Sean Lentz from Ehlers Public Finance Advisors provided an extended presentation on how the borrowing will impact the county and why it has become a necessary strategy across Wisconsin. Lentz explained that state law severely restricts how much a county can raise its operating tax levy but the repayment of general obligation debt is exempt from those strict limits. He noted that after 20 years of living under these state imposed caps local governments across the state have been forced to move capital expenses out of their cash budgets and into debt budgets just to survive.
“I think the challenge is also that under current levy limit rules you cannot unless you cut things from your budget,” said Lentz. “It is very difficult to add capital projects into the budget that you levy for there just is not a way without cutting in other areas and debt for better or for worse is one of the few options”.
Lentz referenced several charts provided to the board members which illustrated the county debt structure and proposed repayment schedule. He explained that the county currently pays about $2.15 million dollars annually toward existing debt which translates to 57 cents per $1,000 dollars of equalized property value.
Lentz also provided context on the overall debt capacity of the county under state law. He explained that state statutes cap the amount of general obligation debt a county can issue but Vernon County is currently operating far below that threshold.
“The state of Wisconsin does have a limit on the amount of general obligation debt that the county can issue for capital projects that you have for Vernon County right now that limit is just under $200 million,” said Lentz. “With the new debt that you are looking at your numbers are going to be somewhere in the range of about $21 to $21.7 million in principal outstanding”.
Lentz noted that these numbers illustrate that the county has used debt very conservatively over the years. Because the county has so much room under its statutory debt ceiling the borrowing plan serves as a viable strategy to fund necessary infrastructure without violating the entirely separate state limits placed on the operational tax levy.
He noted that the county recently renewed its AA- minus bond rating which will help secure lower interest rates when the county takes competitive bids for the new debt in April.
“The double A minus rating is a very very good rating,” said Lentz. “And by having that good rating which is reflective of your budgeting your use of debt in the past some of the demographic issues around the county by having that strong rating that translates into lower interest rates which is less cost to the taxpayers”.
The approved borrowing package will cover $3 million dollars in highway improvements along with funding for new squad cars an emergency management storage facility a Vernon Manor van and new computer software.
Lentz detailed the proposed 20 year repayment schedule noting that the structure is designed to match the life of the new debt with the useful life of the specific assets being purchased. The annual payments will not be identical each year but rather front loaded to quickly pay off short term assets like the sheriff squad cars while stretching the road repair debt over two decades.
“We do not want to be paying debt back on a vehicle that has a five year life,” said Lentz. “We want to have that vehicle paid off in five years so that the term of the debt for that portion of the debt matches up with the useful life”.
Lentz also detailed how the county built an early repayment target into the plan. The county will not have the option to prepay the debt for the first eight years but after the eighth year the county can prepay the balance in cash or refinance the debt if lower interest rates become available.
Supervisor David Strudthoff asked why the county chose an eight year lock in rather than a shorter five year period. Lentz explained that investors demand higher interest rates if a municipality wants the flexibility to pay off the debt immediately. The finance committee ultimately decided eight years provided a balance between securing lower interest rates and maintaining future financial flexibility.
“We talked about the trade off between having a call date so that we do have some flexibility at some point to make a prepayment but not having a call date so aggressive that we have to pay higher interest rates,” said Lentz. “We settled on eight years which in my opinion is aggressive but not too aggressive to hurt us in terms of our interest”.
He also addressed the direct financial impact on taxpayers. Pointing to a projection graph Lentz explained that assuming a conservative 3 percent growth in the county tax base the average homeowner would see a small tax increase starting with the 2027 budget.
“With a 3 percent growth if I owned again that same $200,000 dollar property that would be an increase of about $22 dollars from the previous year budget,” said Lentz.
The presentation sparked some pushback among supervisors regarding the long term sustainability of financing basic county maintenance through debt. Supervisor Lonnie Muller firmly opposed the measure arguing that the county was pushing its financial burdens onto future generations.
“20 years from now we are going to be right back in the same situation,” said Muller. “You guys have made the money but taxpayers have lost totally disapprove of borrowing money to operate on totally disapprove of you do not even run your own household that way.”
Supervisor Mary Henry expressed anxiety about the ongoing cycle of debt and asked if the county would simply be forced to borrow for road projects every single year. Henry placed part of the blame on the state legislature arguing that past state incentive packages for large corporations diverted necessary funding away from local infrastructure and schools.
Supervisor Dave Eggen agreed that state policies have backed local governments into a corner. He noted that he lobbied in Madison two decades ago for the very levy limits that are now strangling the county budget.
“Then the state reneged on school aid highway aid and they forced everybody is having to have referendums or to borrow,” said Eggen. “Every municipality gets put in a corner it is statewide.”
County Board Chair Lorn Goede acknowledged the frustration but argued that the board had to make strategic investments to save money in the long run. Goede pointed out that making payments on the new notes will cost the county roughly $501,000 dollars annually over the next few years.
“My opinion is along with probably every member of this board is we do not want to borrow money and when we do have to borrow money we have to borrow the smart money,” said Goede. “And the smart money is putting $3 million dollars into roads now at four and a half percent interest instead of waiting for 10 years instead of spending $500,000 dollars to rehab a mile of road to stick a million dollars into a complete reconstruction”.
Other supervisors echoed the need to prioritize road maintenance regardless of the borrowing costs. Supervisor Bruce Kilmer noted that the county recently invested heavily in a new branding campaign to attract visitors and that poor infrastructure would ruin that effort.
“If we do not maintain our roads nobody will want to come here and enjoy our great place to live,” said Kilmer. “I want to support moving this forward if we do not maintain our roads people that come here for recreation motorcyclists bicyclists all the people that love to come here and enjoy what we have they are going to say boy their roads are crappy.”
Supervisor Will Beitlich also supported fixing the roads immediately citing the rising costs of construction materials and fuel.
“It is wise in fixing those roads right now we planned ahead,” said Beitlich. “We are doing the right thing because next year it is just going to be that much more.”
Supervisor Wayde Lawler supported the borrowing measure but directed his frustration at the state legislature for creating the underlying problem. Lawler argued that the county is forced to operate with both hands tied behind its back because the state stripped away the local authority to raise revenues but failed to provide the promised state aid to backfill the budget.
“We are here slapping band aids on things and we have no choice,” said Lawler. “We have a choice to do it smartly and I think this is the way to do it but it is an unfortunate circumstance and choices can be made at the state level.”
Because the resolution authorized the issuance of debt it required a three fourths majority to pass. The board utilized its electronic voting system to tally the decision. The resolution passed with 15 supervisors voting in favor and two supervisors voting against. Supervisors Frank Easterday and Lonnie Muller voted no while supervisors Paul Wilson and Kay Stanek abstained from the vote.
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