City Reduces 2021 Tax Levy Increase

Budget vote is Oct. 12; public hearing and final levy adoption are Nov. 2

Sturgeon Bay alders managed to shave several percentage points off the estimated increase to the 2021 property tax levy during a second budget workshop Monday evening.

With each percentage point of tax levy equal to $68,000, it took a number of measures to reduce the estimated increase from 6.54 percent to roughly 3.7 percent. The alders, by consensus, eliminated a stormwater operation, maintenance and repair financing study for $48,000; applied to the debt levy an unanticipated increase of $113,000 in general transportation aid money from the state; and anticipated about $26,000 more in annual revenue by increasing certain fees. 

The bulk of those fee increases – $15,000 – would come from increases to farm market fees that would double over the current rates and be more in line with fees charged by other municipalities within Door County, according to research done by Alderperson Helen Bacon. 

After a suggestion from Alderperson Dan Williams, the alders agreed to reduce the levy by another 1 percent by transferring $68,000 from the city’s rainy day fund. This undesignated fund balance account currently contains $5,291,825, which is about 48 percent of the city’s annual budgeted expenses. Municipal cash reserves are considered “healthy” when they represent about 25 percent of annual expenses.

The alders did not support drawing down these reserves to that level. Healthy reserves position the city for better interest rates when selling bonds and help the city navigate unexpected expenses. 

“It will rain some day,” said City Administrator Josh VanLieshout. “We are always very prudent in applying too much.”

Body cameras for the Sturgeon Bay Police Department were another item more fully nailed down during the Monday workshop. Captain Dan Brinkman found $15,000 in the department’s budget over each of the next two years to defray the $118,489 over five years: $41,500 for the first year, and $19,254 after that. The costs include video storage and software. 

Alderperson Spencer Gustafson said he spoke with officers on each of the city’s three shifts and learned they wanted the cameras and would feel an extra sense of security having them.

“In the world of lawsuits and false claims – claims against anything – body cameras help to prove something wrong or prove something right,” Gustafson said.

The budget includes several studies the city plans to undertake in 2021. One of those is a $13,000 hotel study that will independently determine the market capacity and feasibility of lodging development.

VanLieshout said proposals will arise. The state’s levy-limit formula also favors new development. 

“The only way we can pay for things is new construction,” said Mayor David Ward. “So unless you have more development, you’re stuck.”

Wisconsin’s cap on tax levies means that municipalities and counties may raise the levy each year only by net new construction values. For Sturgeon Bay, net new construction amounted to $8,517,400, allowing an increase of $56,712 or 0.889 percent. Meanwhile, labor costs were expected to rise 2.67 percent. 

The cap does not include money levied for city debt. Servicing that debt – some $400,000 has been added to the debt load in 2021 – causes the majority of the projected tax increase.

The Common Council will vote on a budget Oct. 12. Following that vote, a public hearing on the budget will be held Nov. 2, when the council is also expected to adopt the 2021 tax levy.