St. Croix County audit shows $24.1 million in unassigned general fund balance
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By LeAnn R. Ralph
HUDSON — St. Croix County ended 2023 with an unassigned general fund balance of $24.1 million.
The $24.1 million of unassigned fund balance is 50.5 percent of the general fund expenditures, said Jonathan Sherwood of CliftonLarsonAllen during the audit report to the St. Croix County Board at the September 3 meeting.
The St. Croix County Board’s policy is that the unassigned fund balance to general fund expenditures be at 35 percent, plus or minus 3 percent.
The unassigned fund balance as of December 31, 2023, of $24.1 million compares to an unassigned fund balance of $16.3 million (41.9 percent of general fund expenditures) in 2022 and compares to an unassigned fund balance of $19.8 million (47.2 percent of the general fund expenditures) in 2021, Sherwood said.
In 2020, the unassigned fund balance was $19.5 million (47 percent of the general fund expenditures), he said.
The unassigned fund balance of 50.5 percent means St. Croix County could run on the unassigned fund balance for six months. St. Croix County’s general fund is “fiscally healthy,” Sherwood said.
The health care campus was able to “cash flow” in 2023. While the balance for the health care campus was a negative $660,532, when the Wisconsin Retirement System pensions and depreciation of $878,000 are added to the negative balance, that results in a positive number, Sherwood said, noting that reporting requirements for municipalities require the numbers to be reported a certain way in the audit.
The highway department ended the year with a positive $2.5 million, he said.
The highway department has $9.5 million in unrestricted unassigned funds, noted Ken Witt, St. Croix County administrator.
Borrowing capacity
The county’s borrowing capacity, which by state law is 5 percent of the equalized value, is $819.2 million, and St. Croix County’s current debt is 14.8 percent of the debt limitation, Sherwood said.
St. Croix County’s general obligation bonds are listed at $121.5 million in the 2023 audit.
Sherwood said he would consider the county to be “highly leveraged” if the percent of debt limitation reached 25 percent.
Soft costs
Kerry Reis, county board supervisor, asked if the “soft costs” the county board had discussed at the August Committee of the Whole meeting concerning the health care campus also applied to the highway department.
Some county board members said they wanted the soft costs associated with the health care campus to be paid by the health care campus.
Soft costs include items such as the county manager preparing a report on the health care campus that the county board discussed at the Committee of the Whole meeting.
The health care campus and the highway department are both enterprise funds, which means the accounting is like the accounting done for a business.
The health care campus and the highway department are not comparable, Witt said.
The health care campus does not use taxpayer funding for the operating costs, but the highway department receives $6.5 million in taxpayer funding, he said.
The health care campus is funded by Medicare for people who are there for rehabilitation services following surgery or an injury, and by Medicaid and private pay for the residents who live there.
The health care campus would have to fund the soft costs out of revenue sources available to the health care campus. If the soft costs are charged to the highway department, that would increase the tax levy for the highway department, Witt said.
Increasing the tax levy would mean that St. Croix County taxpayers would pay more in property taxes.
CIP
To reduce the amount in St. Croix County’s unassigned general fund balance to match the board policy of 35 percent, plus or minus 3 percent, $4.3 million would have to transferred out of the general fund, Witt said.
The St. Croix County Board subsequently approved a resolution transferring $4,396,516 to the Capital Improvement Plan (CIP) fund.
The transfer of money out of the unassigned general fund brings the general fund balance down to 38 percent of the general fund expenditures, Witt said.
Transferring money to the CIP saves taxpayers money because the county does not have to borrow money to pay for capital improvement projects. When the county borrows money, the taxpayers pay interest on the money and also pay for the process of issuing debt, he said.
