Dunn County preliminary 2025 budget contains $7.3 million deficit
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By LeAnn R. Ralph
MENOMONIE — Dunn County’s preliminary budget for 2025 contains a deficit of $7.3 million, which is the difference between the “asks” from the county departments and the revenue that will be available.
The executive committee met the week before the county board meeting and has made several recommendations for eliminating the deficit in the 2025 budget, said Kristin Korpela, county manager, at the Dunn CountyBoard’s September 18 meeting.
Dunn County will not have any property tax levy going to Dunn County transit or to the Neighbors of Dunn County, Korpela noted.
The county board also has not yet made a final decision on borrowing money for the 2025 budget or the use of unassigned general fund balance, she said.
The 2025 budget includes a two percent cost of living increase and a step increase for employees, Korpela said.
After $3 million has been deducted from the general fund that was supposed to be transferred to the highway department in 2023, the general fund balance is $13.7 million, or 53 percent of fund balance to general fund expense, she said.
In 2024, $1.4 million was allocated from the unassigned general fund for the new finance system software, leaving $12.3 million in the unassigned general fund balance, Korpela said.
The Dunn County Board’s policy is that the ratio of unassigned fund balance to general fund expenditure should be between 35 and 50 percent, she said.
The county board’s policy retains a larger amount of money in the unassigned general fund balance than generally accepted accounting principles indicate are sufficient.
The Government Finance Officers Association (GFAO) recommends that the percentage of unassigned fund balance to general fund expenditures remains between 25 percent and 33 percent.
Filling the gap
The deficit in the preliminary 2025 budget is $7,319,287, Korpela said.
Recommendations from the executive committee include using fund balance in the amount of $2,313,823. The unassigned general fund balance includes interest money that was earned on the county’s $8.8 million in American Rescue Plan Act (ARPA) funds, she said.
Using $2,313,823 of unassigned general fund balance would leave the county’s fund balance at 38 percent of unassigned fund balance to general fund expenditures, which is more than the 35 percent minimum the county board has established as a policy, Korpela said.
Another recommendation is to reduce county operations by $1,655,464.
The decrease in county operations would be for highway operations and would include eliminating one county highway project from the list presented to the county board in August, Korpela said.
The decrease in county operations also would include eliminating a position request from the Dunn County Sheriff’s Department plus the cost of a squad vehicle that would be needed for the additional position, she said.
The sheriff’s department position would be a recreation officer that the sheriff’s department has asked for several years in a row. The officer would be working with recreational issues such as boating regulation violations and all-terrain and utility-terrain vehicle violations.
Would Dunn County be borrowing money for 2025 for operations or for highway department projects? asked Mike Kneer, county board supervisor from the Town of Menomonie.
The borrowing would be for the highway department, Korpela said.
What is the current fund balance ratio to general fund expenditures? asked Andrew Hagen, county board supervisor from Menomonie.
The fund balance of $12.3 million is 47 percent of the general fund expenditures, Korpela said.
Return of funds
If the county is using money out of the unassigned general fund balance, then low long will it take to replace those funds in the general fund balance? Hagen asked.
Historically, what has been used from the unassigned general fund balance and what has been returned varies by year, Korpela said.
Various amounts have been returned over the past three, four or five years, she said.
The fund balance contains the county’s operating reserves, and how much is kept in reserve depends on what kind of risk the county will face. Some areas of the country have a greater risk of natural disasters, such as wildfires or hurricanes, so because of the risk, counties in those states would need more operating reserves, Korpela said.
In Dunn County, there is a lower risk of those kinds of natural disasters. The unassigned fund balance is replenished by people paying their taxes, she said.
The county needs a reserve, but the county must balance the risk. Dunn County’s auditor said there should be 20 to 30 percent of the general fund operating expenditures in the unassigned fund balance, and Dunn County is well above that, Korpela said.
Increased revenue from the Neighbors and from the Elk Creek solar project should make 2026 easier, said Kelly McCullough, county board supervisor from Menomonie and chair of the Dunn County Board..
By state law, when the Elk Creek solar project is up and running, the company is required to share revenue with Dunn County of $1 million per year.
NDC
Regarding finances for the Neighbors, in 2025, the facility is expected to be able to budget a profit or a surplus, Korpela said.
Increased Medicaid reimbursement rates and a stabilization of the workforce will enable the Neighbors to repay $2.8 million to the general fund over the next few years, she said.
For many years, Wisconsin ranked 48th and 50th in the United States on Medicaid reimbursements to nursing homes. An increase for Medicaid reimbursements that went into effect this year is expected to significantly increase the revenue for nursing homes in the state.
During the Covid-19 pandemic, all healthcare services experienced difficulty in retaining employees, and to help mitigate the workforce shortage, the Neighbors used “travel nurses” which cost significantly more than personnel employed by the county.
Any money that the Neighbors returns to Dunn County will go into the unassigned fund balance, Korpela said.
ARPA
Mark Thomas, county board supervisor from Menomonie, asked about the ARPA funds of $8.8 million issued to Dunn County by the federal government that was intended to help municipalities through the worst of the pandemic.
ARPA funds were distributed to municipalities based on population, and the funds are required to be spent or encumbered by December 31, 2024.
Dunn County earned interest on the $8.8 million of between $500,000 and $700,000, Korpela said.
The ARPA interest is in the general fund and will be used to purchase the county’s new finance system software, she said.
Half of the $8.8 million in ARPA funds was allocated for Dunn County highway projects, while smaller amounts were used for various capital improvements, such as $1.19 million for a door access system for county buildings to eliminate the use of keys. All together, $240,000 was allocated for broadband expansion.
The Dunn County Board will review the 2025 budget at the October meeting and will take action on approving the budget at the November meeting.
