FOND DU LAC COUNTY EXECUTIVE
2019 BUDGET MESSAGE
October 16, 2018
TO THE HONORABLE FOND DU LAC COUNTY BOARD OF SUPERVISORS:
Pursuant to my responsibility and authority under Chapter 59 of the Wisconsin State Statutes, I hereby present to you the proposed Fond du Lac County 2019 budget
The proposed budget that I am presenting to you provides adequate funding for the county to continue the same level of service in the areas of public safety, while also maintaining the county road system, and allows the county to continue operations through 2019. This budget does allow Human Services the ability to address some of the additional needs of our most vulnerable residents in the county.
While there were no significant revenue reductions in the state budget that affect counties, there are also very few, if any, revenue increases in the state budget. Counties, like all municipalities are still under the state-imposed property tax freeze capping revenue, while county costs and state demands continue to rise in most areas. This budget was again difficult to develop without cuts in services, due to cost increases in several areas. My frustration is that the governor and state legislature eagerly take credit for controlling property taxes, but it is the counties that must do the difficult work of making our budgets balance with inadequate revenues.
Other financial impacts in this budget include net new construction growth which for 2018 was 1.48% compared to 1.51% for 2017, that allows for a maximum levy increase of $550,142. Total equalized value rose 3.86% versus 2.80% last year which equates to an inflationary increase of 2.38% in overall property values. The state retirement rate for employees decreased by .15% of wages resulting in a county savings of a little more than $59,000 for 2019. There is also one extra payroll day in 2019 due to the calendar change, which more than offsets that reduction.
Changing staffing needs
Each year as I anticipate the budget process, I look for opportunities to raise revenue, but just as importantly, to reduce cost including staff, where possible. I look for positions that have become vacant or the individual is eligible to retire. In those cases, we do not immediately replace those individuals until we have an opportunity to see whether the vacancy has a negative impact on the services provided by a given department. During the 2018 budget process, it became very clear that the priority for this County Board was to provide staffing for a security check point at the north entrance of the Government Center. That requires us to add three full time positions to the Sheriff’s Office effective January 6, 2019. That will allow for the staffing of two individuals at the security check point following the usual training period of 14 weeks for Sheriff Office patrol deputies. That being said, the proposed time that we would begin staffing the check point would be around the end of April, 2019. The related costs of those positions is estimated to be $222,620. Per our 1981 agreement, the city will pay 34% and the county 66% of the annual staffing costs for two officers. The second board priority a year ago was to add more social workers in the Department of Social Services. This proposed budget does include one additional social worker position, but because of the type of children that are served, there is the likelihood of some additional revenue through the Comprehensive Coordinated Services (CCS) Program. That new position will be effective the beginning of January.
In order to pay for these positions, I looked to a couple of areas. The Code Enforcement Officer will be retiring February 8, and I am proposing that the department be brought under the supervision of the Land Information Officer, Terry Dietzel, who is also the former Assistant Planning and Parks Director. Terry has a significant familiarity with the Code Enforcement Office functions. While there are two reclassifications, one for Terry and one for the Deputy Code Enforcement Officer, there is still a net savings by not filling the Code Enforcement Officer position of $69,797. After some time, Terry Dietzel will evaluate staff levels and can make a recommendation of whether to add back staff for that department.
David Brandenburg, Golf Course Manager, is also recommending a reorganization of golf course staffing. As we know, the Golf Course has been experiencing deficits and David has done everything he can to bring costs in line with revenues. He feels that this reorganization is absolutely essential to eliminating that deficit through an annual savings of almost $60,000.
I am also proposing to return the supervision of the Purchasing/Risk Manager functions of the county to the Director of Administration, effective January 1, 2019. Both staff individuals will report directly to Erin Gerred, Director of Administration. I am also proposing the formalization of fleet management activities in the county under the Highway Maintenance Supervisor, Jeff Bertram. I propose that Jeff would manage the entire county fleet, including assuring that the required maintenance schedules are followed for all motorized equipment. Jeff would be responsible to consult with department heads regarding the most appropriate equipment to purchase. He also would be responsible to initiate the purchase. I believe that system will better streamline the operation and will allow for the pooling of some vehicles and equipment between departments.
Employee health premiums
There has been a significant change to Fond du Lac County’s medical claims experience over the last year. For the previous six years, Fond du Lac County experienced a 1% average renewal increase. In 2019, in order to receive only a 4% increase, employee and family deductibles, as well as out of pocket maximums have been increased. This will have a significant impact on county employees who are on our medical benefit program. Each 1% premium increase represents $100,000 on the levy, with the 4% increase adding $400,000 to the 2019 county budget.
I am including in the salary contingency fund, dollars for a 2.00% increase for all county employees for 2019. I had hoped to do more, but that is all the funds that are available. I am still concerned about the county’s ability to attract and retain employees because our wage increases are no longer keeping up with the private sector. Since Act 10 when employees began paying the employee share of state retirement which will now be 6.55% of salary, county wage increases have not kept up. Fond du Lac County wage increase for 2011 was 0, for 2012 and 2013 .5%, for 2014 1½%, 2015 2%, for 2016 .5%, for 2017 1% and for 2018 1%. For many of our employees their take home pay has grown very little, if any, from what it was in 2010.
In addition to excellent budget discipline on the part of department heads and elected officials, with the elimination of levy requirements for Harbor Haven Health & Rehabilitation, with the delinquent property tax picture improving and worker’s compensation doing well, we are able to afford employee health premium increase of 4% but also provide for a 2% salary increase for all employees. The most significant impact was earned interest earnings on our investments. Just a few short years ago, we were budgeting no more than $200,000 in interest earnings. For 2018, we budgeted $500,000, and we expect to receive at least $800,000 in 2018. For 2019, we believe we can safely budget $1,000,000, which provided $500,000 to place into the salary and fringe contingency fund since interest rates are expected to continue to rise through 2019.
Harbor Haven Health & Rehabilitation
Mark Radmer, Harbor Haven Health & Rehabilitation Administrator, had a goal of operating that facility without requiring a county property tax levy. That goal is being realized for 2018, and now allows for a 0% levy for 2019. That allowed for almost $300,000 in our levy base to be transferred to other departments. The remodeling projects from a few years ago have had the impact of increasing our Medicare population as well as private pay, and at the same time, keeping a high level of occupancy. That is expected to continue through 2019.
We continue to modernize the county’s technology which as we all are witnessing, has a short life span. This proposed budget includes $522,500 in the 2019 Capital Improvement Plan (CIP) to replace the security system including cameras, in the Jail. The current system is outdated and beginning to fail, thus the request for replacement.
In 2018, we will have upgraded two of the five court rooms by installing new audio and video technology in those court rooms. I am proposing we spend an additional $60,000 in 2019 for a third court room. We will need to budget additional dollars in the future to continue with the remaining two court rooms.
In the Communications Center, it is proposed that we fund $490,000 to replace the aging dispatch center consoles. Like other levels of technology, age has taken its toll.
Highway Department projects
The largest project that the Highway Department will undertake in 2019 is the rehabilitation of Highway V between Highway VV and Rienzi Road where it intersects with Highway 45. The intersection at Highway VV (Pioneer Road) will include a round-about. The total project will have a cost of $1,897,000. Highway G through the village of St. Cloud is planned for a total reconstruction in 2020 however, there are funds budgeted in 2019 to continue with the design and all related costs to prepare the project for construction.
Also included is ongoing funding for the design of an overpass of the railroad tracks on Highway N (Kinker Road) in the town of Friendship. The plan at this time is to construct the overpass in 2020. The project is eligible for partial state funding and it is our hope that we will receive more than half of the funding for the construction from the state of Wisconsin.
New Highway Garage
The County Board has approved moving forward with the new Highway garage. The current capital improvement plan called for design in 2018, construction to begin in the fall of 2018, and completion late in 2019. In addition to a new highway garage, the county board decided to house Sheriff impound vehicles at that site, as well as Parks Department maintenance, Senior Services vehicles, and an outdoor shooting range that will be needed in the future. There is sufficient funding in the 2018 budget to complete the design work and bid the project. The bids are being tabulated by C.D. Smith. As of today, the total projected cost is $25,935,570. The site work for the complex is beginning, as weather permits. $4,000,000 is included in the 2018 budget to begin construction. The balance of $21,500,000 is included in the 2019 proposed budget.
Sales Tax Revenue and Allocations
The budgeted 2019 sales tax revenue is $8,388,877. We have seen sales tax revenue increases averaging over 2% per year and we anticipate that trend will continue as the economy continues to grow. Sales tax dollars have been allocated for 2019 as follows:
$2,964,225 debt service on the Mercury Marine, Alliance Laundry Systems, C.D. Smith and Mid-States Aluminum loans.
$3,100,000 for Highway projects.
$935,002 for economic development including $400,000 more for the Fond du Lac County Economic Development Corporation Revolving Loan Fund.
$1,389,650 for other capital projects within the county.
Additionally, $890,694 of unapplied sales tax revenue through 2018 is projected to be carried over to 2019.
The 2019 proposed levy is $44,438,507 as compared to $43,726,873 or an increase of $711,634 including debt service payments. Equalized value, reduced by TID (Tax Incremental District) increased 3.94% to $7,483,164,400. The tax rate of $5.938 compares to $6.07 for 2018. Also, to meet this budget, I am proposing that we apply $2,000,000 from the unassigned general fund reserve that resulted from surpluses in the 2017 budget. That compares to $1,915,785 for the 2018 budget. Our undesignated reserve is projected to remain flat as compared to year-end last year. The county has had the long-time practice of applying the previous year’s surplus to the subsequent year budgets and to maintain a stable unassigned undesignated general fund to protect our cash flow and our bond rating.
This proposed budget includes other areas of service to the people of this county that are too numerous to mention. The state of Wisconsin requires counties to provide a whole host of services from the Courts to the Jail to Human Services to Highway Maintenance and other areas. Most of the funding from the state, with the exception of general transportation aids, has either slightly decreased or has held steady over the past number of years, making it more challenging for the counties to continue to provide the services that one, the state requires, and two, that the citizens of our county expect. Through the hard work of our department heads and the elected officials, we continue to provide the services that the citizens expect as we continue to search for ways to reduce costs and enhance revenue wherever possible. Because of the dedicated department heads, elected officials and employees that we have in Fond du Lac County, we have traditionally provided a very high level of service at a good value to the citizens of the county. It is my goal and their goal that we continue that tradition.
I wish to thank Erin Gerred, Director of Administration, Karen Kuehl, Director of Finance, Tammy Pinno, Assistant Finance Director, Stacie Basler, Fiscal Services Director,
Mary Jo Myers, Highway Accounting Manager and their staffs, and all the department heads and elected officials for their assistance in compiling the 2019 budget.
Allen J. Buechel