November 11, 2001
From: JVANDEHEY2@new.rr.com
Tony,
I have a sincere question for Steve regarding municipal borrowing. Do not know the answer, so it is not always wise to ask, but here goes. In the 1980's Winnebago County created an IDB (Industrial Developement Board). The economy was difficult at best. Interest rates were double digit and municipalities were struggling to progress. The county placed one million dollars into this revolving fund for seed money, to jump start industrial developement. As loans were paid back, the money was reloaned, I believe at half prime. I appoint people to this board. A supervisor, Doug Pearson (CHAMCO), the board chair, the county treasurer, the corporation council, me and a few citizens. The Village of Winneconne, City of Omro, the Town and City of Menasha are some municipalities that have taken advantage of this board to create industrial parks. Apparently, the City of Oshkosh has not participated in this revolving loan system and Bob Fick has said many times that is because the board requires the municipalities to assure their "full faith" and taxing authority to back the loan. Clearly, there are economic factors, rates etc., that affect their choosing this borrowing. Additionally, the loans are much smaller than general obligation borrowing, but I am curious why the City has been reluctant to participate in this local system. The borrowed money is local funding that is invested in the region rather than being invested in other market opportunities. I believe this IDB was created to help local municipalities during tough times and the effort seemed sincere. Please advise. V