Menasha Mayor Talks About Moving the City Forward After Steam Plant Debacle

Link to July 12 Appleton Post-Crescent article, "Burning Questions: Menasha's Merkes talks about city's way forward".

Excerpt: The first half of the four-year term Mayor Don Merkes earned in 2008 by defeating long-time incumbent Joe Laux has not been business as usual for a first-time mayor.

The failure of the Menasha Utilities steam plant project and subsequent city default on $22.8 million worth of municipal revenue bonds has the city trying to work its way out of a federal securities lawsuit filed by investors and unresolved environmental actions against the coal-fired facility that has been mothballed since its Oct. 9 closure.

As a result, Merkes has had to spend an inordinate amount of time, and taxpayer funds, meeting with the city's various legal and financial experts as the community tries to work its way out of the historic default and potentially daunting financial repercussions.

[snip]

What lessons have been learned as a result of the steam utility debacle?

I think the biggest thing that we've learned was to look at who we're providing services to, who our constituents are and who those customers are. And are we providing services that benefit the entire community or are we providing services that benefit a small portion of the community? And then to also look at the risks in providing those services and the costs.  [Emphasis added.]

Retiring Guy assumes the Menasha Public Library achieved a high score as a result of this exercise.

[snip]

The non-bondholder part of the steam plant debt backed by city taxpayers was roughly $17 million. The city has been able to convert that into long-term financing. How important was that to the community?

Without the state Trust Fund, we probably wouldn't have been able to refinance them into long-term financing. We'd have likely would have defaulted on those bonds as well. So it was very important to have access to the state Trust Fund. Also, it was a lower interest rate (5.5 percent) than we would have likely received even if we could have accessed the capital markets.

The Board of Commissioners of Public Lands not only manages the Common School Fund, but it also operates the one of the largest public lending programs in the state, financing a variety of community and school projects.

Related article:
Menasha default:  What does it mean for city services?  (9/2/2009)