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By LeAnn R. Ralph
ELK MOUND — The Village of Elk Mound has an unassigned general fund balance of $463,000, according to the audit report for 2021.
An additional $161,000 in the general fund is assigned fund balance set aside for a specific purpose, said Kimberly Shult of Baker Tilly US LLP during her report on the 2021 audit to the Elk Mound Village Board at the April 4 meeting.
The village’s unassigned fund balance has been on a slight upward trend over the past five years, she said.
The unassigned fund balance represents nine and a half months of expenses in the budget, and the recommendation is to have at least two months of the budget on hand in the general fund, Shult said.
Elk Mound has $1.6 million in general obligation debt, which includes $457,000 for the sewer and water utility and the $400,000 loan for Elk Mound’s new Tax Increment Finance District, she said.
The legal debt limit allowed by state law is 5 percent of the equalized value of the municipality.
Elk Mound is at 73 percent of the debt limit and paid $70,000 in principal and interest on $1.2 million in capital expenditures, Shult said.
Six percent of the 2021 budget was for non-capital expenditures, while 12.8 percent of the 2020 budget went for non-capital expenditures. The bond rating agencies recommend 20 percent or less, so the 6 percent indicates a reasonable level of debt service, she said.
In 2021, the general fund had revenue of $756,000 for tax revenue and intergovernmental funds. The dollar amounts for revenue remain largely unchanged from five years ago, and that is due to the state’s levy limit law, Shult said.
The public charges for services include increased reimbursements for the Colfax Solid Waste and Recycling Program, she noted.
The Elk Mound Village Board decided to the join the Colfax Responsible Unit for recycling.
The state Department of Natural Resources requires all municipalities to either be an RU or to join another RU, and the Colfax RU has nine municipalities all together.
The miscellaneous revenue in 2021 includes $59,000 for the sale of the lot for the Dollar General store, Shult said.
The expenditures for 2021 of $766,000 include 43 percent for general government, while 21 percent went for public safety and 25 percent was for public works, she said.
Water and sewer
The water and sewer utilities had a net operating loss of $44,900, although it is typical to have a loss because Elk Mound has depreciation that drives the loss. The water utility had a deficit of $16,596 while the sewer utility had a loss of $28,347, Shult said.
The cash flow “looks better” than the $44,900 loss would indicate, which means the sewer and water utilities generate enough cash to pay the expenses, she said.
In November of 2021, Elk Mound enacted new water and sewer rates, which should help adjust for inflation, Shult said.
The expenses for the utilities have gone up 17 percent over the past five years, so if the village board approves a rate increase of 3 percent per year, that will help the utilities keep up to date with operations, she said.
The sewer and water utility had a cash balance of $271,000, down slightly over the previous year, but still representing 10 months of operations on hand in a cash account, Shult said, noting that the utilities should have at least three months of cash on hand.
The percentage of capital assets financed through debt versus earnings and equity is important, and the Elk Mound utilities have 50 percent of capital assets financed through earnings, she said.
Karin Wolf, the village’s new clerk-treasurer, “did a nice job of closing the books,” Shult said.
Terry Stamm, village trustee, asked about rate increases for the sewer and water utilities and how to “close the gap.”
The sewer utility had more of an operating loss, while the water utility was close, so the village board could keep going with a 3 percent water rate increase unless there is a capital expenditure, Shult said.
The water expenses were a little more this year, but that is nothing unusual because the cost of everything is going up, she said.
The village can continue with the 3 percent simple rate increases allowed by the Public Service Commission of Wisconsin, and if the 3 percent water rate increase is not sufficient, then the village can go through the PSC process for a water rate increase, Shult said.
The Elk Mound sewer utility is deregulated, and the 10 percent will help to bring down the loss. After a full year of the utility rate increases, the village board will have a better idea of what other increases may be necessary, she said.
Stamm noted that there will be recommendations coming for new wastewater treatment requirements that will not be part of the normal expenses.
More federal funding will now be available, too, Shult said.
In other business, the Elk Mound Village Board:
• Approved a bartender operator’s license for Kayla Farrell (Elk Mound Travel Stop).
• Approved a bartender operator’s license for Danielle Berger (Elk Mound Travel Stop).
• Approved a bartender operator’s license for Kelsey Hobart (The Pourhouse).
• Approved the following changes to the non-ordinance village fee schedule: preliminary breath test for a village resident, an increase from $5 to $10; preliminary breath test for a non-village resident, an increase from $10 to $30; finger printing of a village resident, an increase from $10 to $30; finger printing of a non-village resident, an increase from $15 to $50.
• Approved replacing Truck No. 3 for the public works department in the amount of $58,993, using unspent 2021A general obligation note proceeds, and selling the existing truck outright with the snowplow for a minimum bid of $6,500. The village would receive a trade-in of $6,500 from the dealer on the existing truck, said Mark Levra, director of public works. Used trucks with 150,000 miles are selling for $8,000 to $9,000 without a snowplow, he noted.
• Approved referring the employee annual performance reviews for the clerk-treasurer, the director of public works and the police chief to the employee relations committee.