Colfax approves revenue and expense budget of $1.187 million for 2018

By LeAnn R. Ralph

COLFAX —  The Colfax Village Board has approved a revenue and expense budget of $1.187 million for 2018, representing a $26,495 increase over the 2017 budget.

In addition to approving a budget of $1,186,989 for 2018 that is 2.28 percent more than last year’s budget at the December 6 budget meeting, the Colfax Village Board also approved a tax levy of $500,000.

The “base” tax levy for the 2018 budget is $465,000, and the additional $35,000 included in the property tax levy is the result of the village board taking a portion of the debt payment outside of the revenue limit as well as adding $1,172 of tax levy not used the previous year.

Prior to the public hearing on the budget and the village board’s budget meeting, Sean Lentz of Ehlers Inc., the village’s financial consultant, spoke to village board members at a meeting of the audit and finance committee about taking the debt payment outside the revenue limit.

The village board’s audit and finance committee consists of the entire village board.

State law sets a limit on how much money school districts and municipalities can collect through property taxes.

But state law also allows debt payments to be added onto the base levy instead of taken out of the base levy.

For example, if the base levy is $100,000, and the debt payment is $10,000, if the debt payment is paid out of the base levy, that would leave $90,000 to spend on other expenses. If the debt payment is taken outside the revenue limit and added onto the base tax levy, then that would leave $100,000 to spend on other expenses but the tax levy would actually be $110,000. In the first scenario, the taxpayers are paying a total of $100,000, and in the second scenario, the taxpayers are paying a total of $110,000.

Tax levy increase

Based on the 2018 budget, Colfax would be allowed to increase the tax levy by the debt payment of $77,430, Lentz said.

If the village board approved an adjustment of $33,400 to add to the tax levy, the village would not be using all of the capacity available from the debt payment, he said.

Every year the village has a debt payment, the village board can approve adding the debt payment onto the base tax levy, Lentz said.

Several village board members wondered how Colfax’s financial position compared to other small municipalities.

“Colfax is in a better position than many municipalities,” Lentz said.

Hydrant charge

The hydrant charge included in the fire protection budget can also be moved from the general fund budget to the water utility budget, Lentz said.

The state Legislature recently approved allowing municipalities to move the hydrant charge.

Moving the hydrant charge to the water utility budget would have to be approved by the Public Service Commission of Wisconsin, Lentz noted.

In the 2018 budget, the hydrant charge is $96,640. Moving the hydrant charge from the general fund budget to the water utility budget means that it  increase the expenses in the water utility budget from $253,613 to $350,253.

Village board members indicated they were not in favor of moving the hydrant charge to the water utility budget.

Every year the village does not take the debt payment outside of the revenue limit “is a missed opportunity,” Lentz said.

Technically, the village also could include the Tax Increment Financing District debt in the adjustment to the base levy, but that can create problems later on, he said.

The total amount the village board could, technically, add to the base levy would be $203,273 rather than not quite $35,000.

Handcuffs

Gary Stene, village president, noted the state legislature has “handcuffed” municipalities and has put them in a difficult position.

All municipalities — villages, cities, townships and counties — are faced with tight budgets, he said.

The municipalities can either “cannibalize” their budgets and start cutting services, or they can go to their taxpayers and try to pass a referendum to exceed the revenue limit, Stene said.

Saying the word “referendum” to taxpayers is like saying a swear word, he said.

Lentz said a couple of the municipalities he works with have tried to pass referendums to exceed the revenue limit but that none of them have been successful.

The state has reduced the amount of state-shared revenue sent to municipalities, and “our roads are falling apart” with no money to fix them, Stene said.

But the state legislators and the governor like to say “we did not raise taxes,” he said.

The state legislature “is too chicken (expletive) to do it themselves,” Stene said.

“The state should be man enough to say we need to raise taxes and here’s why,” he said.

That the village has the capacity to increase the base tax levy but does not need to increase it by the entire debt amount is to Colfax’s credit, Lentz said.

Bigger hole

During the special village board meeting that followed the audit and finance committee meeting and the public hearing on the budget, village board members spent a certain amount of time discussing the information they had received from Lentz.

If the village does not use all of the levy available, the village’s budget will “get in a bigger hole faster,” Stene said.

The village has to keep moving forward, he said.

Even with the $35,000 added to the base tax levy, the village is not addressing road issues and is not answering the question of how Colfax can keep up with road maintenance, said Lynn Niggemann, village administrator-clerk-treasurer.

Niggemann recommended the audit and finance committee meet quarterly to discuss the village’s finances and the state of the budget.

Most municipalities are wondering how they are going to pay for roads, said Casey Rihn, village trustee.

The audit and finance committee may need to evaluate the full-time position added to the streets budget, Niggemann said.

“The village is not a careless spender,” she said, adding there is not a lot of room to make cuts in the budget.

“It’s tight,” Niggemann said.

Stene, who serves on the Dunn County Board, pointed out the importance of maintaining certain wage rates for village employees.

Dunn County is losing employees to St. Croix County and other counties because of the pay scale. That’s why Dunn County is increasing the pay rate by 7.5 percent to remain competitive with other counties, Stene said.

“We still have to be able to hire people for the going rate,” he said.

If Colfax added to the population, the village not need to hire more employees, Stene said.

Advice

The village board should take Lentz’s advice because he is the expert in finances, said Annie Jenson, village trustee.

“We don’t want to raise taxes, but —,” she said.

The village is stagnant right now and needs more development, Jenson said.

“I want to see the village move forward,” said Mark Halpin, village trustee.

The village board has not added any of the debt payment to the base tax levy in previous budgets, he said.

“I don’t like the increase in taxes, but I like the services that come with it,” said Keith Burcham, village trustee.

Burcham noted if he does not want to pay the increase in taxes, he could move to another municipality, “but I like the services.”

The village board should sit down with the employees to discuss the budget to “make them aware we are between a rock and a hard place,” Stene said.

Rihn said he would be opposed to doing anything that might cause the employees to look elsewhere for work.

“It always costs more to replace employees,” he said.

“All of the municipalities are in the same position,” Stene said.

Approval

The Colfax Village Board unanimously approved a revenue and expense budget of $1,186,989 that included a property tax levy of $500,000.

The village board also approved an expense budget of $452,706 and a revenue budget of $480,187 for the Colfax Rescue Squad.

In addition, the village board approved a revenue budget of $259,590 and an expense budget of $253,613 for the water utility, and a revenue budget of $176,700 and an expense budget of $186,528 for the sewer utility.