Dunn County Board reviews $3.74 million in capital improvement requests
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By LeAnn R. Ralph
MENOMONIE – The Dunn County Board has reviewed $3.74 million in capital improvement requests for the 2025 budget from various departments in the county.
Every year, the Dunn County Board adopts a five year Capital Improvement Plan (CIP) as part of the budget process, said Kristin Korpela, county manager, at a CIP workshop for the Dunn County Board on April 27 that lasted nearly four hours.
The requests are for projects or items that cost more than $10,000. The requests do not include the 2025 highway paving project requests, which are built into the budget, she said.
Korpela stressed that it is the job of the department heads to request what they believe is necessary to keep their departments running as efficiently as possible and to provide the services needed by Dunn County residents.
Dunn County Board supervisors should remember “not to shoot the messenger,” she said.
CIP projects can include building, remodeling, repairing, the purchase of vehicles, non-recurring high-cost expenditures, systems and infrastructure, Korpela said.
Outstanding debt
Dunn County’s current outstanding debt at the end of 2023 was $28.165 million, according to Dr. Beata Haug, Dunn County’s chief financial officer.
The county has a AA/Stable rating by Standard & Poor, she said.
In 2013, the county borrowed $1.37 million for facility improvement. The debt will be paid off in 2026, and the remaining principal is $505,000, according to information provided to the county board.
In 2014, the county borrowed $7.15 million for facility improvement and enterprise resource planning (ERP). The debt will be paid off in 2027, and the remaining principal is $3.105 million.
In 2019, the county borrowed $8 million for county highways, remodeling of the community services building, information technology infrastructure and equipment, and ERP software implementation. The debt will be paid off in 2029, and the remaining principal is $5.025 million.
In 2020, the county refinanced healthcare bonds in the amount of $13.9 million. The debt will be paid off in 2032, and the remaining principal is $12.6 million.
In 2014, the county refinanced bonds for CIP and facility improvements in 2013 and 2018 and a CIP loan with Dairy State bank in the amount of $6.56 million. The debt will be paid off in 2030, and the remaining principal is $4.28 million.
In 2022, the county borrowed $3.05 million for CIP projects. The debt will be paid off in 2032, and the remaining principal is $2.67 million.
The total amount borrowed in the last 10 years has been $40.015 million with a remaining principal of $28.165.
Monica Berrier, county board supervisor from Menomonie, asked about the funding for
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constructing The Neighbors of Dunn County.
The nursing home loan, which was taken out in 2011 or 2012, was refinanced in 2020 with $13.9 million remaining, Dr. Haug said.
The original cost for The Neighbors was $24 million, said Vaughn Hedlund, county board supervisor from Boyceville.
The management team is always looking at ways to refinance loans, and whenever there is a chance to refinance debt at a lower interest rate to save money, the management team brings it to the county board for consideration, said Gary Stene, county board supervisor from Colfax and vice-chair of the county board.
Principal and interest
Information also was provided to the county board on principal and interest payments over the next nine years, until 2032.
In 2024, the payment on principal will be $4.48 million, with $589,813 in interest, for a total of $5.07 million.
The chart on principal and interest payments shows the principal and interest steadily declining.
In 2028, the principal will be $2.8 million, with $230,513 in interest, for a total of $3.026 million.
In 2032, the principal will be $1.495 million, with $15,698 in interest, for a total of $1,510,698.
The total payments in principal over the next nine years will be $28.165 million, with $2.435 million in interest, for a total of $30.6 million.
Gary Bjork, county board supervisor from Colfax, asked if the principal and interest chart included borrowing $3 million every year.
Dunn County’s Capital Improvement Plan includes capital improvements for the next five years based on the premise of borrowing $3 million every year while at the same time paying off $5 million in debt every year, so that the county’s debt still decreases by $2 million per year.
The chart with the principal and interest does not include borrowing $3 million every year, Dr. Haug said.
But the county will be paying back more every year than it borrows, even if the county borrows $3 million each year, Bjork said.
“Correct,” Dr. Haug replied.
The plan of borrowing $3 million every year while at the same time paying off $5 million steadily brings down the county’s debt “while still getting done what is needed,” said Kelly McCullough, county board supervisor from Menomonie and chair of the Dunn County Board.
Salaries
Salary and fringe benefits increase by about 4 percent per year and include merit increases and cost of living increases, along with any increases in benefits, for a total of about $600,000, Dr. Haug said.
The highway department spends $5 million to $7 million on county road construction each
year, she said, adding that there is a minimal increase each year for operating expenses.
The county staff is on a wage grid with a starting wage and a 2.7 percent annual increase, if the funds are available, and a cost of living increase, if the funds are available. The grid goes as high as Step 11, Korpela said.
The annual increase, the cost of living increase and any increases in the cost of benefits usually amounts to around 4 percent, she said.
Last year, the cost of operations for the entire county increased by $180,000, Korpela said.
The Dunn County Board approved a budget for 2024 of $99 million last November.
The biggest increases in the budget are for salary and benefits, highway projects and capital improvement projects, Korpela said.
General fund
Dunn County’s general fund balance had $12,529,453 at the end of 2023, Dr. Haug said.
By Dunn County ordinance, the fund balance must contain not less than 35 percent and no more than 50 percent of the general fund operating expenses, she said.
The general fund is unassigned money for which there are no restrictions on what it can be used for, Dr. Haug said.
Best practices approved by the Government Finance Officers Association (GFAO) recommend keeping the general fund at 35 percent of the general fund operating expenses, she said.
The GFAO recommends between 25 and 35 percent of the general fund operating expenses in the general fund, but the ordinance approved by the county board is 35 percent, Korpela said.
If the general fund is at 50 percent of the general fund operating expenses, that means Dunn County could operate on reserves for six months, she said.
CIP
Here are the capital improvement projects presented to the Dunn County Board for the 2025 budget:
• Land and water conservation – $25,000 for fleet vehicle purchases. Land and water conservation has been leasing vehicles, and the plan was to buy the vehicles at the end of the lease, said Chase Cummings, county conservationist. Upon further consideration, the county may be better off staying with the lease program, and if so, the $25,000 will not be needed, he said.
• Emergency management and communications – 911 phone system upgrade for $80,000, and a mobile command center for $400,000. A grant has been received for the 911 phone system, and the mobile command unit could be pushed out a few years, said Melissa Gilgenbach, director of emergency management and communications. The mobile command center can be used by any agency in Dunn County and was purchased in 2004 with Homeland Security funds, she said. The mobile command center is used six to eight times per year for emergencies, such as large fires, and was recently used to help find a missing teenager, Gilgenbach said.
• Sheriff’s department – $300,000 to expand the sheriff department’s storage building; $40,000 for interview room recording hardware and software; $50,000 for a transport van; $260,000 for four squad trucks; total of $650,000. The sheriff’s department has 34 to 35 squad vehicles that are replaced every four years or so when they reach a certain mileage, said Sheriff Kevin Bygd. Storage is important because the sheriff’s department must hold onto evidence until a prison sentence has been completed. For example, the sheriff’s department must store the car for 99 years that Ezra McCandless used in the murder of Alexander Woodworth in the Town of Spring Brook in 2018 because McCandless was sentenced to life in prison, he said.
• Facilities and parks – demolition of the older boiler room and stack for $25,000; Caddie Woodlawn house roof for $30,000; replacement for $125,000; John Deere mowers for $90,000; Judicial Center carpet and flooring for $100,000; for a total of $370,000. The roof on the Caddie Woodlawn house is now cedar shakes, and the plan is to replace the cedar shakes with a steel roof so the roof holds up longer, said Scott Nabbefeld, Dunn County facilities and parks manager. The Judicial Center carpet and flooring was originally installed in 1998, he said.
• Highway Department – highway equipment for $1.45 million; replace fuel tanks at Rock Falls and Colfax shops for $120,000; for a total of $1.565 million. A snowplow truck costs about $350,000 and a new backhoe is around $400,000, said Dustin Binder, highway commissioner. The highway department also has other large equipment such as bulldozers and pavers, he said, noting that it is “difficult to get 10 years out of a plow truck.” The highway department spends about $700,000 on fuel each year, Binder said.
• Information technology – core network switches for $350,000; telephone system for $220,000; for a total of $570,000. The core network switches are at the “end of life” stage this year, and the telephone system will be switched to headsets that plug into computers, said Dan Dunbar, chief information officer. If the county was going to replace the telephones with standard phones, the county has 475 phones, and the cost would be about $500 each with a four-year life cycle, he said.
• Neighbors of Dunn County – base trim on three houses per year for $30,000; new sign for $20,000; and water to water/boilers for $25,000; for a total of $75,000.
The total for county-wide capital improvement projects for 2025 is $3.735 million.
What’s next
From 2020 to 2024, Dunn County’s allowable tax levy increase under state law was an increase of $1.5 million or a 6.7 percent increase, Korpela said.
In the last four years, the consumer price index increased by 20.68 percent, she said.
In other words, the county is able to collect 6.7 percent more in property taxes, but the county’s expenses increased at a faster rate because of increased costs associated with inflation.
The state’s property tax levy increases are based on net new construction in the county.
The county could ask residents to approve by referendum exceeding the property tax levy limit. The county could do less of something in order to do more of something else. The county could borrow more money, or the county could encourage building construction by businesses and residents so that the property tax levy can increase accordingly, Korpela said.
Reducing the debt will decrease the property tax levy, but it will also reduce or eliminate funding for highway projects and capital improvements, she said.
Korpela emphasized that it was her job and the job of the chief financial officer to give the county board members all of the information they would need to make whatever decisions the county board members agreed to make.
The timeline for adopting the capital improvement plan is that at the May 15 meeting of the county board, there will be a presentation on county debt.
At the June 12 meeting, the executive committee will formulate recommendations for the capital improvement plan.
At the June 19 meeting, the Dunn County Board will consider the capital improvement plan and will adopt a plan for 2025 to 2029.
Readers should note that the capital improvement plan for the 2025 budget could include all of the requests from the various departments, none of the requests from the various departments, or something in between.
