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Village approves financial road map PDF Print E-mail
Written by Mark Jaeger   
Wednesday, 14 December 2016 19:19

Series of workshops preceded action on plan that sets benchmarks for future municipal spending

It was months in the making, but the Saukville Village Board approved a financial management plan last week after a handful of workshops involving village officials and representatives from Ehlers, the village’s financial consultants.

The plan was crafted by trustees with the guidance of Mike Harrigan, Ehlers chairman and senior municipal advisor, and Greg Johnson, the firm’s vice president.

Workshops on the plan were held in March, April, May, July and August. During those sessions, officials were briefed on the village’s current financial status and its capital financing options.

In addition to an assortment of spreadsheets evaluating such financial issues as fund balance and debt service, the 40-page plan underlined the conclusion that the village follow a 15-year financing schedule for capital improvement spending and a 10-year timetable for utility projects.

With an equalized valuation of $420 million as of Jan. 1, the consultants noted that the village has a debt limit of $21 million. According to the state Constitution, a municipality may carry general obligation debt equal to 5% of its equalized value.

As of the end of the year, the village will have a debt of $14 million — or 68% of that limit.

Because of its responsible use of debt and a substantial fund balance, the consultants noted the village continues to carry a credit rating of Aa3 from Moody’s Investors Service, which is characterized as “very strong.”

As evidence of that conservative approach to budgeting, the plan notes that the village has carried a general fund balance of more than $1.2 million for each of the last four years. That balance represents roughly 40% of general fund expenditures.

The plan also looked at tax rate and levy projections for the next five years. According to spending already plugged into the village’s project schedule, the tax levy is expected to top $2.9 million in 2018 (a 6% hike from the 2017 budget recently approved) and continue increasing to $3.3 million by 2021.

The unused levy capacity in each of those years would range from $653,000 to $911,000.

If those projections hold, the village tax rate would also see an upward climb — from $7.27 per $1,000 of valuation in 2018 to $8.03 in 2021. The recently approved 2017 tax rate was $6.87 per $1,000.

For a home valued at $300,000, the village tax bill would increase from $2,181 in 2018 (a projected increase of $120) to $2,410 in 2021.

One recommendation from Ehlers is that village trustees consider setting a maximum tax rate for debt service, in the interest of keeping the tax rate stable.

In reviewing those numbers, Johnson was quick to point out the “crystal ball” nature of the projections.

“This is really just a plan,” he said. “Things are going to change and shift. This document can be used as a guide to be adapted as needed.”

The plan also summarized the consensus of board members, that it is their goal to find “the appropriate balance between a desire to keep taxes manageable, and the necessity to replace aging infrastructure that has reached the end of its useful life, and fund park improvements intended to enhance quality of life in the community.”

On a more general level, the plan notes that the village needs to continually update its capital improvement plan as needs and priorities change.

Harrigan, who previously served as the village administrator, said he was impressed by the amount of effort the trustees put into crafting the plan.

“The fact that this board has taken the time to develop this plan is noteworthy,” he said. 

“You really put in the time to consider all the options. In that respect, this plan is really yours, not ours.”

Village President Barb Dickmann, who long has claimed to enjoy the process of pulling together municipal budgets, said she too was pleased with the final product.

“Well done everyone, this is pretty impressive,” Dickmann said.

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