By LeAnn R. Ralph
COLFAX — The Colfax Village Board started out with a deficit of $31,782 for the proposed 2018 budget, and while board members have agreed on cuts to the budget, the deficit is still at $6,000.
In addition to a three-hour meeting November 15, the Colfax Village Board also discussed the budget at the November 27 meeting.
In the initial draft of the proposed 2018 budget, revenue was listed at $1.116 million and expenses were $1.149 million.
A couple of options exist for dealing with the deficit, said Gary Stene, village president, at the November 15 meeting.
The options include covering the deficit with money taken from the village’s undesignated fund balance, going to referendum to ask the taxpayers to approve exceeding the revenue limit, or cutting spending, he said.
If the difference between revenue and expenses becomes too large, then the village board might have to consider eliminating services, Stene said.
Proposed decreases to the budget discussed at the November 15 meeting included for the police department budget $1,300 less for retirement benefits, $500 less for training and travel, $750 less for heat, $500 less for building and grounds maintenance, and a worker’s compensation decrease of $1,500.
Proposed increases to the police department budget included $500 more for liability insurance and $500 for property insurance.
Additional decreases included $1,000 less for outside services in the fire protection budget and $3,000 less for street lighting.
Proposed decreases to the streets budget were $1,000 less for small equipment, $2,500 less for fleet maintenance and $2,000 less for outside services for storm sewers.
The amount for taxes included in the proposed 2018 budget is $647,195.
At the November 15 meeting, village board members discussed the possibility of removing the capital outlay portions of the budget, which include $8,000 for the police vehicle replacement fund, $10,000 for street equipment, $35,000 for streets and $10,000 for economic development.
The problem with removing capital outlay from the budget, noted Rand Bates, director of public works, is when it comes time to replace a piece of equipment, there is no money set aside for it.
The village currently pays 90 percent of the health insurance premium for employees, and the employees pay 10 percent, Niggemann said.
To save money, the village board could consider paying a smaller portion of the health insurance premium, she said.
Carey Davis, village trustee, said he would be opposed to reducing the village’s portion of the health insurance premium and that it would be “a slap in the face” to the employees.
Requiring the village’s employees to pay more for health insurance premiums would result in a decrease in take-home pay for the employees, and none of the other village board expressed support for that option.
The 2018 budget already levies up to the limit, Niggemann said at the November 27 meeting.
The state legislature imposed revenue limits in 1993 to limit the amount of property taxes school districts and municipalities can collect every year.
The levy limits, put into place nearly 25 years ago, were intended to be temporary and were based on how much a municipality had spent in recent years.
Those municipalities that were conservative in their spending were left with a low property tax levy limit, Stene said.
State law allows municipalities to take a certain amount of general obligation debt payment “outside” of the levy limit.
Taking the debt service payments outside the levy limit means that instead of paying the debt payment out of the allowable tax levy, municipalities can levy additional taxes to make the debt payment.
Niggemann said she had checked with Ehlers, Inc., the village’s financial consultant, and Colfax could take up to $230,000 in general obligation debt outside of the levy limit.
Debt service for the 2018 budget is listed at $191,134, with $77,431 for general obligation debt and $113,403 for Tax Increment Finance District debt.
The village could take the $77,431 for general obligation debt as an adjustment to the levy limit, Niggemann said.
If the village board decides to adjust the levy limit, board members could vote at the December meeting to change it, she said.
Taking debt outside of the levy limit would allow the village board access to more money without going to a referendum, Stene said.
The village’s budget is at a point now that the only way to reduce expenses would be to eliminate services, he said.
Stene noted the village board could, for example, eliminate the police department or the department of public works as a way to save money.
Carey Davis, village trustee, said he did not believe the village would be able to get along very well without a police department.
If the department of public works were eliminated, Stene said he did not ever want to hear a single word of complaint from residents about snow not being plowed from the streets.
Without the department of public works, the village’s parks also would not be maintained, grass would not be mowed on village property, and if a sewer main backed up into a house or a water main broke, there would be no one around to fix the problem.
The Colfax Village Board will be holding a public hearing on the proposed budget for 2018 on December 6 at 7 p.m.
Sean Lentz of Ehlers, Inc., the village’s financial advisor, will be making a presentation about the village’s finances at 5:30 p.m., prior to the public hearing on the budget, to give village board members as much as information as possible so they can make informed decisions about the debt service payments and the levy limit.
“We are regular people trying to do the best we can,” Stene said.
Stene noted when he is out and about in the community, people often talk about their ideas and what they think would be best for the village, but they are never willing to serve on the village board.
If the village board takes the general obligation debt service payments outside of the revenue limit, as the debt decreases, the surplus will increase, he noted.
If the village board decides to keep the debt at an even level, when one debt is paid off, money can be borrowed again for street improvements, developing the industrial park, buying more land or whatever other projects are necessary, without raising property taxes to cover the projects, Stene said.
Several village board members pointed out that village residents often complain bitterly about the property taxes they pay in Colfax.
The village of Colfax has a mill rate comparable to other villages and cities in the area, Niggemann and Stene said.
According to 2016 mill rates included on Dunn County’s website, the mill rate in Colfax was $24.68 per $1,000 of property value.
The mill rate for 2016 in Elk Mound was $25.49 per $1,000 of property value.
The mill rate for 2016 in Boyceville was $22.52 per $1,000 of property value.
The mill rate in Downing is $21.58 per $1,000 of property value.
The mill rate in Ridgeland was $21.59 per $1,000 of property value.
The mill rate in Wheeler was $22.81 per $1,000 of property value.
The mill rate in Menomonie was $24.37 per $1,000 of property value.
Based on those mill rates, a $100,000 property in Elk Mound would pay $81 more in property taxes than a $100,000 property in Colfax.
A $100,000 property in Boyceville would pay $216 less in property taxes than a property in Colfax.
A $100,000 property in Downing or Ridgeland would pay $310 less in property taxes than a property in Colfax.
A $100,000 property in Wheeler would pay $187 less than a property in Colfax.
A $100,000 property in Menomonie would pay $31 less than a $100,000 property in Colfax.