Proposed 2008 Evansville Operating Budget

(Ed.note: The following is from the October 9, 2007 Common Council meeting packet of information.)

Memo

To: Mayor Sandra Decker and Members of Evansville Common Council

From: Eric Jepperson, Finance Director/Treasurer

Date: October 5, 2007

Re: Proposed 2008 City Budget
Summary of Proposed 2008 City Budget

The attached proposed budget has been prepared with the primary goal of continuing to provide basic services to a growing community, while maintaining a stable tax rate. In addition, the budget will be prepared to meet the guidelines of the State of Wisconsin Expenditure Restraint Program and to ensure that the City’s levy complies with any potential State property tax levy limit, if one is imposed through the State’s budget, which has not yet been finalized.

The State of Wisconsin Expenditure Restraint Program is a program where municipalities receive revenue from the state for voluntarily controlling the level of their general fund operating expenses. Each year, operating expenses can increase by no more than the cost of living and a portion of the growth in net new construction (60% of the growth in net new construction, capped at 2%). Evansville’s net new construction to be used for this budget period was 1.994%. The 2008 limit will be equal to the cost of living plus the 60% of 1.994%, or, 1.196%. The City’s Expenditure Restraint limit to qualify for a 2008 payment is 4.896%. The proposed budget currently includes a general fund operating expense increase of 1.697%.

The State of Wisconsin has not finalized its current budget. Until it does so, the City’s 2008 tax levy will not be held to a Property Tax Levy Limit by the State of Wisconsin. In the past this limit was equal to the ratio of the increase in equalized value from net new construction divided by the total equalized value as of January 1 of that year, or 2%, whichever was greater. In addition to this levy amount, any new debt service for the next budget year could be added. The levy is for the purposes of general operations, EMS, Library, Cemetery, Debt Service and Capital projects. The proposed budget includes a levy increase of $97,806, or 5.058%.

The levy included in the proposed budget would result in a modest property tax rate decrease of 0.34%. Under this scenario, the City tax on an average residential value would increase $16.09 from $1,003.04 to $1,019.13 because of an increase in the average residential assessed value.
Notable Budget and Staffing Changes

Assessed Value - The total assessed value used to determine the property tax rate was estimated at $309,125,944. The State assessed value for industrial property has not yet been finalized. We have incorporated an estimate prepared by the Wisconsin Department of Revenue for the City’s industrial property. The City’s current assessment ratio is 0.956541047.

Tax Levy (General Fund and Capital) –This budget incorporates the Council’s goal of a reduced tax rate. The tax levy has been held to an amount to provide for this property tax rate decrease of .34%.

Revenues – Property tax revenue supporting the general fund is decreasing by 2.34%. An increase in interest revenue on temporary investments, increased numbers of licenses and permits, and the additional revenues from the newly established police department vehicle registration service are expected in 2008. The City’s intergovernmental revenue (i.e. transportation aid, shared revenue, expenditure restraint payment) is remaining fairly constant.

Fire District, and Public Fire Protection - The City of Evansville’s share of funding the fire district will increase in 2008 to $127,382, which is a 6.72% increase. Public fire protection will remain at $175,000 as ordered by the Wisconsin Public Service Commission. Public Fire Protection specifically refers to the cost of maintaining the fire hydrant system. Communities throughout Wisconsin collect public fire protection charges either through the property tax levy or as a special charge on the water bill. Evansville collects this charge through the property tax levy.

Department of Public Works Staffing Increase – The additional full time Public Works employee that was approved in the 2007 budget is in the process of being hired now. The full impact of the salary and benefits will begin in 2008. This General Laborer is needed at this time to address additional workload. The salary and benefit cost for this position is $61,300 per year.

EMS Township Service Agreement – Revenues from the township service agreement have been increased to reflect an increase in the per capita payment to $20. The City tax levy currently provides a City resident payment of over $20 per capita.

EMS Expenses – Additional expense in 2008 for EMS pagers and ambulance laptop computers. Grants have been applied for and potentially will offset some, or most, of this additional cost.

Debt Service Fund – The property tax levy to fund the Debt Service Fund for 2008 will increase by 42.29%, or $167,862. This is due to additional borrowings by the City for various capital projects. Most of this additional debt will be reimbursed to the City by the TIF districts through additional tax increment.

Capital Projects Fund - Items from the 5 year Capital Plan for the year 2008 have been included.

Wastewater Treatment Plant – The budget for Waste Water Treatment Plant includes upgrades to the plant estimated at $1,000,000. This is expected to be funded by borrowing.

Water Utility Budget – The City of Evansville recently had an application to increase electric rates approved by the Wisconsin Public Service Commission. Rates had not been increased for approximately ten years. The rate adjustment is necessary due to increases in operating expenses and costs of various capital projects undertaken in 2007, and into 2008. This rate increase is reflected in the budget revenues.
Budget Schedule

The Council will hold a public hearing at their November 13, 2007 Council meeting, will make any appropriate modifications, and will adopt the Ordinance, which adopts the 2008 budget and sets the tax levy.
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