Next up: Budget workshop Monday, Oct. 5
Budget talks got underway on Monday in Sturgeon Bay during the first of two workshops scheduled for city alderpeople and staff.
The Common Council will render a final verdict Nov. 2 on how much it will spend in 2021, and what that means for property taxes.
As it stands right now, the property tax levy is currently proposed to increase 7 percent in 2021, an amount described as “a pretty hefty increase” by Mayor David Ward.
Ward asked the alders to take into consideration that other taxing authorities, like the school district and county, will also increase their levies.
“So, I just ask you to think about that entire context,” he said.
Each 1 percent of the levy translates to approximately $68,000, Ward said. To reduce the levy would mean to reduce expenses by that amount correspondingly.
City Administrator Josh VanLieshout said there’s nothing dramatically different in next year’s budget. Services have neither broadened nor contracted and taxes continue to fund the majority of city operations, 72.62 percent in 2021. The operating expenses, meanwhile, will increase about 0.82 percent over this year to $11,024,630.
Most of the 7 percent tax levy increase proposed is owing to an increase in debt payments for capital improvements. Those payments are scheduled to increase some $400,000 in 2021, Ward said.
The primary differences for any given budget year lie within the capital budget and the improvements scheduled. These are paid for with the tax levy, debt, grants and other sources.
Some of the major improvements for 2021 include street resurfacing, continued curbing and sidewalk replacement, storm sewer work, vehicle purchases, Otumba Park beach improvements, and security and safety improvements at City Hall.
Meanwhile, the city’s cash reserves remain healthy. Officially called the “undesignated fund balance,” those reserves are intended to help cities navigate sudden or unbudgeted expenses.
The Governmental Finance Officers Association recommends that municipalities at minimum retain cash reserves of at least two months of general operating revenues or expenditures. VanLieshout said the undesignated fund balance is currently 48 percent of budgeted expenses, or $5,291,825, while “healthy cash reserves are considered to be 25 percent of expenses,” VanLieshout said. In this case, that would be $2,756,160.
The city cannot use any of these cash reserves for the operating budget according to budget principles the city adopted in 2008. Ward suggested they revisit those principles at their next budget workshop scheduled for Monday, Oct. 5 to see if they still agree with them.
“It’s 12-years-old,” he said. “Maybe it’s good advice, maybe it isn’t.”