Dunn County Board reviews $92.5 million proposed budget for 2023
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By LeAnn R. Ralph
MENOMONIE — The Dunn County Board has reviewed a proposed budget of $92.5 million for 2023, which includes $2.3 million in general fund money to balance the budget as well as the potential for borrowing $902,000.
The proposed budget for 2023 compares to the adopted budget of $96.1 million for 2022, according to information provided to the Dunn County Board at the October 19 meeting.
The originally proposed budget for 2023 had a deficit of $4.8 million, but the proposed budget of $92.5 million is balanced, said Dr. Beata Haug, Dunn County’s chief financial officer.
The state-imposed levy limit of $23.5 million is an increase in the levy limit for the 2022 budget by $1.004 million, she said.
Dunn County has outstanding debt of $32.9 million, and the general obligation debt for the county is 17.2 percent of the county’s debt limit of $192 million, Dr. Haug said, noting that Dunn County has unused debt of $159 million.
State law allows municipalities to borrow up to 5 percent of the municipality’s equalized value.
The numbers Dr. Haug presented were based on the most recent audit of the county’s finances.
General fund
Dunn County’s general fund balance, as of December 31, 2021, was $17.2 million, Dr. Haug said.
The general fund balance is an increase of $4.9 million over the general fund balance in 2020, she said.
The percentage of unassigned fund balance to general fund expenditures is 60.6 percent, and the Government Finance Officers Association recommends that the percentage of unassigned fund balance to general fund expenditures ranges from 25 to 33 percent, Dr. Haug said.
To look at it another way, Dunn County has twice the amount in the unassigned fund balance as is recommended by the GFOA.
$250,000
The county board’s executive committee recommended that the budget deficit of $4.8 million be reduced by $250,000, Dr. Haug said.
Management actions to reduce the deficit by $250,000 included eliminating one position request from the sheriff department’s budget; eliminating one vacant position in administration; and updating state revenues and operating expenses based on currently available information, she said.
Another action was to analyze all of the vacant positions for eligible healthcare benefits, Dr. Haug said.
The initial assumption is that if people were hired for all of the vacant positions, all of them would sign up for family healthcare benefits, but after analyzing current trends, not all new employees sign up for family healthcare, she said.
Instead, the numbers show that 60 percent of people hired sign up for family benefits, 25 percent sign up for single benefits and 15 percent do not sign up for benefits, Dr. Haug said.
The assumptions were based on a vacancy ratio of 2.8 percent, or $1.2 million, but the current vacancy ratio is at 6 percent, she said.
County employees
Another strategy to reduce the budget deficit included decreasing the overall staffing cost by changing contracted personnel to become county employees, which involved employees in the facilities department and the transit department, Dr. Haug said.
Because the cost of contracted labor is high, there are savings by making the contracted labor county employees, she said.
Gary Stene, county board supervisor from Colfax, noted that the county had originally gone to the practice of contracted labor to save money, but in the end, contracted labor actually ended up costing more than if the people were county employees.
“I’m glad to see them coming back,” he said.
One example of contracted labor costing more than county employees was the site attendants for Dunn County Solid Waste and Recycling.
The Colfax Messenger reporter serves on the Colfax Solid Waste and Recycling Committee as the representative for the Town of Otter Creek.
The site attendants for the collection sites were hired through a staffing agency. The staffing agency received about twice the hourly rate over the amount the employees were actually making per hour.
When Dunn County Solid Waste and Recycling ceased operations and the Colfax Responsible Unit took over the operation of the Colfax and Elk Mound collection sites, the site attendants became employees of the Village of Colfax and received a wage increase of $4 to $5 per hour. The increased wages were still about $5 an hour less than the staffing agency had been paid.
According to the 2023 budget summary, transferring employees from contracted to county employees for transit and facilities results in savings of a little over $600,000.
$3.2 million
After the deductions from the budget deficit of $4.8 million for eliminated positions, insurance costs and transferring employees from contracted labor to county employees, another $3.2 million was needed to balance the budget, Dr. Haug said.
One suggestion is to apply $2.3 million of the unassigned fund balance toward paying for the increase in salaries and benefits and for new position requests, she said.
The remainder of the deficit would be covered by borrowing $902,000, Dr. Haug said.
Borrowing another $1 million would increase Dunn County’s percentage of used allowable debt to 17.72 percent, an increase from 17.20 percent in 2021, she said.
In other words, Dunn County would still have about 82 percent of the allowable debt limit remaining.
Applying $2.3 million of the county’s general fund balance to the 2023 budget would put the general fund at 52.55 percent of the general fund expenditures, a decrease from the current 60.6 percent of general fund balance to general fund expenditures, Dr. Haug said, noting that the recommendation is to keep the general fund at 25 to 33 percent of general fund expenditures.
The Colfax Messenger covers the St. Croix County Board for the Glenwood City Tribune Press Reporter.
St. Croix County has a policy that if the general fund is more than 33 percent of the general fund expenditures, the county board transfers money out of the general fund to apply toward other parts of the budget, such as capital improvements, so that the general fund stays between 25 and 33 percent of the general fund expenditures.
St. Croix County Administrator Ken Witt has noted that not all counties are in the same financial position as St. Croix County, which has collected more than $1 million in sales tax per month for five months so far this year.
Real money?
Tim Lienau, county board supervisor from Menomonie, asked if the $4.8 million increase in the general fund was “real money” or whether it is money that is already intended for another use.
“It’s real money,” said Kelly McCullough, county supervisor from Menomonie and chair of the Dunn County Board.
The Department of Health Services transferred money to the general fund in 2021 and so did The Neighbors of Dunn County, Dr. Haug said.
The money was not American Rescue Plan Act (ARPA) funds, but rather, was “covid money” that did help the budgets for DHS and The Neighbors, she said.
Ann Vogl, county board supervisor from Menomonie, noted that the county board had decided to use some ARPA money for capital improvements and to not borrow $3 million for this year.
Dunn County’s capital improvements plan includes borrowing $3 million per year. The premise is that putting capital improvements on a schedule is a better strategy than borrowing fluctuating amounts each year to make capital improvements.
Capital improvements include replacing vehicles, replacing computers and other equipment, and building maintenance such as replacing roofs.
Sustainable?
How long will be it be sustainable to balance the budget by using general fund money and borrowing more money? Vogl asked.
Dunn County will be doing “okay” for the next several years, and at this point, the state of the economy and the availability of other money beyond that is unknown, McCullough said.
If Dunn County borrows $3 million per year, by 2036, because other loans will have been paid off, the debt service amount decreases dramatically, Dr. Haug said.
Conditions are changing, with increases for vehicle costs and materials for the highway department as well as increased salaries, she said.
On the other hand, Dunn County’s levy limit increased by $1 million this year because of the increased equalized value, Dr. Haug said.
Dr. Haug said she would continue to analyze the county’s borrowing on a monthly basis to see if there is a need to borrow the $1 million for the 2023 budget.
At this point, it is unknown whether Dunn County will have to borrow the additional $1 million, McCullough said.
Gary Bjork, county board supervisor from Colfax, noted that Dunn County has investments and that with the increases in interest rates, Dunn County’s investment earnings have also increased.
Where is the money going for the increased return on investments? Bjork asked.
The money is included in the budget for the administration, Dr. Haug said.
Michael Rogers, county board supervisor from Menomonie, pointed out that the “covid money” was a one-time return but that the expenses are recurring.
Rogers said he was concerned about the increased interest rates that the county would pay to borrow more money.
The Dunn County Board will consider whether to adopt the proposed budget for 2023 at the county board’s next meeting on Tuesday, November 15.
