OFFICE OF COUNTY ADMINISTRATOR

Transcription

1 OFFICE OF COUNTY ADMINISTRATOR STEVEN A. CORBEILLE COUNTY ADMINISTRATOR KAREN A. CAMPS EXECUTIVE COORDINATOR DATE: October 17, 2007 TO: FROM: SUBJECT: Honorable Members of the Marinette County Board of Supervisors Steven A. Corbeille 2008 Administrator s Budget and Budget Message 2008 ADMINISTRATOR S BUDGET MESSAGE AND BUDGET It is my pleasure to present to the Marinette County Board of Supervisors the administrator s annual budget message and recommendations for the 2008 budget as required by Wisconsin Statute 59.18(5). The information contained in this message will assist you in your review of the administrator s budget. The operating budget for 2008 totals $74,361,247 and the debt service budget totals $5,370,138. This requires an operating levy increase of 3.86% for a total operating levy of $13,412,002. There will be no debt service tax levy in 2008 due to the application of the county sales tax. I would like to thank the Finance Committee, the Finance Department, department heads and staff in all county departments for their assistance in the preparation of the 2008 budget. Special thanks are extended to Finance Director, Patrick Kass and Executive Coordinator, Karen Camps whose dedication and knowledge were valuable in presenting this budget. The administrative budget process could not be successful without the work and cooperation of each of those noted. THE BUDGET PROCESS Attached is Marinette County s Fiscal Year 2008 Budget Policy, adopted by the County Board of Supervisors on June 26, Not only does this policy statement set forth the schedule for budget approval, it also establishes budget preparation guidelines for department heads and the county administrator. A high level of cooperation on the part of departmental staff has marked the 2008 budget process. Department managers had a clear understanding of the directions given to them by the budget policy and the financial restraints imposed upon the county by the uncertainty caused by the State of Wisconsin s delay in adopting the state budget. The partisan bickering at the state level has caused municipalities to speculate at whether there will be a tax levy freeze for the 2008 budget. This also forced municipalities to guess at what percentage increase would be allowed by the State of Wisconsin. Marinette County Administration set the goal of a 4% tax levy increase for the 2008 budget. Department Heads achieved this challenge. Budget requests were discussed with department heads and managers, line by line, in meetings with the Administrator and Finance Director prior to the preparation of this 2008 budget. Before proposing any administrator s budget revisions to department requests, revisions were discussed with department staff and alternatives were sought to meet department needs and goals. In some cases, we were able to agree on an adjusted expenditure or revenue estimate, in other cases, we agreed to reassign existing county 1926 Hall Avenue Marinette, Wisconsin Phone FAX

2 resources in support of the department s needs. This year, as in the past, we met with some departments on more than one occasion to come to a mutual understanding in finalizing their budgets. Following the review of departmental budget accounts, the Finance Department completed a summary of revenues and reserves to determine the revenues available to meet total county expenditures. The administrator s 2008 budget was then presented to and reviewed by the Finance Committee and Executive Committee on October 10, Departments and agencies wishing to explain their requests to the committee had the opportunity to do so at that time. Likewise, committee members had an opportunity to discuss departmental requests with the staff involved. The 2008 administrator s budget recommended to the County Board will reduce the county s operation tax rate from $3.826 to $3.699 per thousand of equalized valuation. A special purpose levy for the County Aid Bridges Program for towns decreased from $.028 to $.020 per thousand of equalized valuation. This amount is only levied against towns, as they are the only municipalities eligible for this program. Towns submit petitions for bridge aid and the county is required to place an equal amount in the county budget. The amount levied for the County Aid Bridges Program is dependent upon petitions from towns and varies from year to year. The non-lapsing funds and fund balances applied to the 2008 operating budget totals $1,784,270. This amount includes $300,000 from the tax equalization fund. The largest increases in non-lapsing funds applied are from funds received from the jurisdictional transfer of Hwy 141 to County road CP ($585,350) in 2005 and the application of Community Development Block Grant (CDBG) funds ($200,000) toward anticipated 2008 CDBG loans. The public hearing on the County s 2008 budget will be held in the County Board room at 11:00 a.m. on October 30, At that time, the general public may speak to the County Board regarding the budget proposal. The budget, together with any desired modifications, will be subject to final passage by the Board at the October 30, 2007 meeting. EQUALIZED VALUATION Marinette County s 2007 equalized valuation increased 7.42% to $3,626,074,200. This increase is due to increases in existing property valuation and new construction within the county. Marinette County s 2007 rate of growth is consistent with the increases we experienced in prior years. Our equalized valuation should be fairly stable at the current rate of 7.42% for the next couple of years. With the ongoing development of the Tommy Thompson Centennial Park and anticipation of development of the Peshtigo River State Forest, the tourism portion of our economy should experience significant growth. I urge the Board to continue its support of economic development/tourism measures designed to create and retain jobs throughout the county. PROPERTY TAX FREEZE Wisconsin law limits each county s operating tax rate to a maximum of its 1993 level. Marinette County s maximum operating levy tax rate limit will remain at $5.003 until legislation is enacted repealing or amending the freeze. Many counties were caught off-guard by the passage of the rate limit in 1993, and those whose rates were artificially low for one reason or another have found it difficult to respond to changing financial conditions. The state tax levy freeze expired on January 1, Until the State of Wisconsin imposes another freeze, counties are only required to follow the 1992 operating rate freeze. If the county were to adopt the 2008 budget prior to the State of Wisconsin adopting a new levy freeze, the county would only be subject to the 1992 operating rate freeze. 2

3 The budget I have proposed maintains the operating rate below the legal maximum and includes a modest increase in Marinette County s operating tax levy of$498,463. Marinette County s unrestricted reserves have decreased from $9,000,000 to $7,000,000 on December 31, This decrease is attributable to the establishment of a reserve account in the county s general fund for the deficit the county currently has in the self-insurance fund. When this deficit is rectified, the reserve account can be eliminated, thus raising the undesignated amount to the $9,000,000 target amount set by the County Board. This does not include $5,058,908 in the healthcare improvement fund. During the 2002 budget process, the County Board approved the establishment of a tax equalization fund. General fund unexpended appropriations and excess revenues for the year will first be used to offset any overexpended appropriations and the balance will be placed in the tax equalization fund, which may be applied against subsequent budgets. On January 1, 2007 the Tax Equalization Fund balance was $662,490 and we estimate the balance to be $500,000 on December 31, $300,000 of this balance has been applied to the 2008 budget. SALES TAX Marinette County enacted a county sales tax effective October 1, The State of Wisconsin had estimated the sales tax would generate $2,186,000 annually in Marinette County. Current experience shows that the annual revenue generated by the sales tax will be approximately $2,900,000. The usage of sales tax proposed in my budget is necessary to maintain our commitment to provide essential services and maintain county infrastructure. The debt service tax levy would have been $2,254,969 or $ per thousand of equalized value if the sales tax had not been adopted. STATE SHARED REVENUES The State shared revenue estimate provided to the county indicates that our 2008 payment including the utility portion will be $1,725,885. Please keep in mind that this is only an estimate, and can be changed by the Department of Revenue during This revenue source does fluctuate from year to year and over the past few years it has been very difficult to predict the amount the state will actually provide to the county in aidable revenues. The County Board should be aware that the State of Wisconsin has targeted this revenue source for elimination in the past and the threat of reduction or elimination of shared revenue will more than likely resurface in the future. CIRCUIT COURT FUNDING The circuit court support grant is used to offset the cost of a judicial assistant and any court costs, except those related to courtroom security, rent, utilities, maintenance, rehabilitation and construction of court facilities. The grant for 2008 is expected to remain at the 2007 level of $158,886. The county anticipates some continued financial support for unreimbursed guardian ad litem costs from the state. DEPARTMENTAL USER FEES In addition to revenue from the property tax and from other levels of government, this budget reflects revenues for departments that have instituted or proposed user fees for User fees are a significant source of revenue as these fees aid the general taxpayer in supporting the delivery of specific goods or services. Whatever the level, user fees provide only a fraction of the total support for targeted county activities; much of the cost remains subsidized by the county as a whole. Department heads are advised during every budget cycle to review department revenue sources and provide recommendations to their 3

4 committees in an effort to limit departmental costs to the taxpayers. The County Board amended and approved user fees for 2008 at the September 25, 2007 meeting. The implementation of user fees is more than a simple matter of extracting money from one pocket rather than the other. Among the benefits: Non-residents using county services pay user fees, thereby reducing the cost to county property tax payers. User fees avoid subsidization where the service is not provided to the general public, but for the specific benefit of the person charged. User fees provide rationing the provision of certain services and/or monitoring the demand for such services. User fees for certain services are justified on the basis of equity and efficiency; they produce information on the demand levels for services, encourage restraint on the part of taxpayers/consumers and help to make the connection between the amount paid and the services received BUDGET HIGHLIGHTS The following summary will identify and provide an explanation of important tax levy changes to departmental budgets from the previous fiscal year. Most county departments 2008 budget requests were reasonable and in compliance with the Board s stated budget policy. Minor changes or departmental reductions are not reflected in this summary. Health and Dental Self-Insurance: County share of premium increase $1,440,000 Employee contribution increase (520,000) Child Support Program: Absorbed Federal program reduction 133,062 County Clerk: National election 56,000 Land Information Department: Achieved tax levy below the 4% goal (65,741) Sales Tax: Increase in amount applied toward budget (315,900) Sheriff Department: Retain drug officer and officer added for military leave 187,274 Elimination of Positions: Department Position HHSD Niagara Services Manager HHSD Job Coach Reg. of Deeds Deputy Register of Deeds Print Shop Printer (eliminated 11/30/08) The above recommendations include utilization of $781,943 of sales tax in the 2008 budget. 4

5 ADMINISTRATOR S BUDGET STATEMENT The budget I am presenting will allow the county to continue delivering services to the public while maintaining the county s financial condition. With the uncertainty of the State s Budget situation it is important to understand that the county needs to preserve its financial condition in the event the state imposes further restrictions on the county s ability to levy taxes. If the next biennial state budget includes a provision to restrict the county s levy, it is essential that the county preserve its fund balances for future budget years. I strongly warn the county board that applying fund balance above the amount recommended in my budget is dangerous. The artificially lower levy amount would have an adverse effect on the county s budget for years to come and could result in deeper cuts in services to future budget years. My budget includes the usage of sales tax revenue collected above what is required to retire our debt. The promise made to the taxpayer when we implemented the sales tax was to eliminate the debt service portion of the county s tax levy. This budget is consistent with that promise. Without the application of sales tax, the services your constituents rely upon as well as maintenance of county infrastructure will be decreased and/or eliminated. If the County Board does not concur with my recommendation to utilize excess sales tax, the 2008 budget will have a $781,943 deficit. The County Board will be forced to re-evaluate budget priorities and reduce the budget by $781,943 to meet the tax levy freeze. Administration will compile a list of options for the Board to consider in accomplishing this goal. However, to refrain from unnecessary concerns over potential service reductions, this list will not be generated unless required by County Board action. County administration has provided the County Board with the financial stability necessary to operate county government. Administration still feels that the proposed 2008 budget will allow the county to maintain its excellent financial condition. It is imperative that everyone concerned understands the importance of controlling expenditures and following strong budgetary practices. The 2008 budget can be successful if everyone works together. As a local government, our primary focus must be on continuing to improve the effectiveness, efficiency and accountability of current county operations. Attachments 5

6 BUDGET POLICY FOR FISCAL YEAR 2008 It is the legal responsibility of the County Administrator to communicate to the County Board of Supervisors the condition of the county, recommend such matters to them for their consideration, and submit to them the annual budget for consideration and adoption. The County Administrator has determined that the annual budget be considered as a policy document, an operational guide, the county's financial plan, and an avenue of communication. In order to plan, compile, and complete a budget document for the County Board, it is necessary for the Administrator and administrative support staff of the county to have certain guidelines and policies to follow. The following 2008 Budget Policy shall be the guideline and policy of the Marinette County Board of Supervisors. The Marinette County Administrator and Finance Director shall apply this policy to all Marinette County Departments/Agencies for the preparation and review of the county's 2008 budget. (1) COUNTY SERVICES New county services shall be considered only if: (1) State or Federal laws specifically mandate such action with corresponding financial commitment; or (2) The Finance Committee recommends and the County Board approves the proposed new services and/or implementation of certain changes based upon the analysis of existing programs. (b) The county should continue to reorganize departments as well as enter cooperative agreements with other municipalities to reduce the tax levy while still attempting to maintain adequate county services. (2) REVENUES (b) Revenues. The State of Wisconsin is in the process of adopting the biennium budget. It is projected the process of budget adoption will not be finalized until September or October The Governor has included a provision in his proposed budget to limit municipal growth to 4% or growth in equalized value attributable to new construction, whichever is higher. In comparison, the last two years municipalities were restricted to growth of 2% or growth in equalized value attributable to new construction, whichever was higher. At this time, municipal shared revenues are not in question within the Governor s proposed budget. Debate over the budget continues, which will make for a difficult budget process. Sales Tax. The County s sales tax collections are committed by ordinance for payment of principal and interest on debt service resulting in no debt service tax levy. In prior year budgets, the County Board approved using surplus sales tax collections to fund capital outlay expenditures. The usage of surplus sales tax collections may be needed to fund capital outlay expenditures in the 2008 budget to continue to provide current services at the levels that are currently available to taxpayers. 6

7 (c) (d) User Fees and Charges. Every effort shall be made to identify and/or establish appropriate user fees or charges, as authorized by State law, for appropriate public services as recommended in the 2008 Schedule of Marinette County User Fees. This User Fee Schedule will be presented to the County Board for approval in September Intergovernmental Revenues (Grant-In-Aids). (1) There shall be no new grant applications accepted in 2008 that will require new county tax levy for funding unless the Finance Committee recommends and the County Board approves the grant application. (3) FUND BALANCES (2) All existing grants shall be identified in the budget process indicating the various governmental participants, i.e., state, federal, and county, comparing 2007 with 2008 funding levels. (b) Recognizing the importance and need for the county to maintain a sufficient undesignated fund balance to meet the needs of fiscal stability and cash flow requirements, an undesignated fund balance equal to $7,000,000 shall be maintained in the General Fund. A tax equalization fund was established in Unexpended appropriations and excess general fund revenue were deposited in this fund. This fund will be used to maintain the tax rate when special projects are placed in the budget. It is estimated that the balance will remain in the $300, ,000 range by December 31, (4) CONTINGENCY We are predicting revenues to slightly exceed expenditures for fiscal year While a surplus is anticipated, the board must realize there is no guarantee of surplus funds for 2007 or any future fiscal year. This fund will not be available for a pay as you go solution for small capital projects during Each year there shall be appropriated in the General Fund, a contingency line item in an amount no less than $250,000, which will be administered pursuant to the State Statutes and County Policy. (5) CAPITAL IMPROVEMENT/REPLACEMENT FUND Recognizing the need for the county to plan for future capital improvement projects and the replacement, restoration and maintenance of the county's infrastructure, the budget shall reflect the appropriate level funding as indicated in the county s capital improvement plan for calendar year (6) INDIRECT COST PLAN The County Board realizes that certain departments, i.e., Finance, Human Resources, Administration, Corporation Counsel and others, are providing essential administrative services to all county departments and are an important part of county government. The Board also recognizes that these administrative services have no available revenue sources, but does recognize that State and Federal government does allow for the partial reimbursement of expenditures associated with the operation of these administrative departments. Therefore, it 7

8 shall be the policy of the County Board to continue to prepare and submit a county indirect cost plan for the purpose of recovering these funds. This shall remain in effect as long as revenues received exceed the cost of the production of the plan or until changed by county policy. (7) PERSONNEL POLICY Staffing Levels. (1) All departmental staffing shall be identified in the proposed 2008 budget. It is the county s intent not to exceed current staffing levels within departments. (2) Additional personnel requests and/or personnel changes must comply with the process stated in the Personnel Policies and Procedures Manual. (3) Should any existing Federal or State grant funds be eliminated or grants are reduced below the 2007 level of funding, the position will be subject to review for future continuation by the Parent Committee, Personnel Committee, Finance Committee and County Board. (b) Employee Compensation. In considering employee compensation, the county shall consider such factors as the rate of inflation, employee morale, and the need of attracting and retaining high-qualified employees when determining increases in compensation for all groups of county employees. In an effort to meet this need it requires that employee compensation be budgeted in accordance with: (8) EXPENDITURES (1) Any provisions of the County s Personnel Policies. (2) The wage increases approved in all bargaining contracts for all bargaining unit employees for (3) A 3% wage increase will be included for 2008 if bargaining has not been completed for a specific bargaining unit for Health and dental insurance premium contributions for union employees will increase from 6% to 10% for Health and dental insurance premium contributions for management employees will increase from 11% to 15% for the 2008 budget. (4) Reclassification requests and annual salary adjustments shall not be considered unless there has been a substantial change in duties and responsibilities, which may be required for the proper function of the department. The process for such requests shall be in accordance with the Personnel Policies and Procedures Manual or the applicable bargaining unit contract. (c) It shall be the policy of Marinette County that all departments of Marinette County shall operate within the approved 2008 budget. The Marinette County Finance Committee and the Marinette County Board of Supervisors shall authorize any transfers from the general fund for departmental budget shortfalls as individually determined on a case-by-case basis. General expenditures and outlay will not be increased in the 2008 budget. Increases will be considered if there is no effect on the overall departmental tax levy. If it becomes 8

9 necessary to request additional funds above the departments/agencies 2007 operational budget, documentation and justification for such increases shall be presented to the County Administrator during the budget process for consideration. If recommended, such request must receive final approval by the Finance Committee and County Board. (9) COMPLIANCE WITH BUDGET PROCEDURES (b) All county departments/agencies shall prepare and submit their 2008 budget requests in accordance with the 2008 budget schedule as presented and updated from time to time. At any identified deadline, failure to provide the information on the required format will result in a departmental budget for 2008 based on 2007 budget and actual information as may be adjusted by the County Administrator and Finance Director. (10) 2008 BUDGET ADOPTION Pursuant to State law the County Administrator shall submit the 2008 budget and message to the County Board for their consideration and adoption in accordance with the budget schedule. (11) COUNTY OPERATING TAX LEVY FOR THE YEAR 2008 The County s operating levy for budget year 2008 will be set based upon the level of service prior County Board s have indicated they wish to provide our citizens. The county s operating tax levy for budget year 2007 was set at $12,913,539 an increase of $290,801 over The County applied excess sales tax collections of $446,043 to fund tourism promotion and many capital outlay items within the 2007 budget. The largest challenge facing Marinette County in developing our 2008 budget are the unknown provisions that will develop during the debate over the State of Wisconsin s Biennial Budget Bill. This may require us to act quickly to a provision limiting spending beyond what is known at this time. The County Board, through its various governing committees, should be prepared to reduce, innovate or eliminate current service levels to comply with provisions ultimately contained within the State of Wisconsin Biennial Budget Bill. 9

10 2008 BUDGET SCHEDULE DOCUMENT June 18, 2007 June 26, 2007 Budget Policy to Finance committee for review and recommendation to County Board. County Board approval of the Finance Committee recommendations on the Budget Policy. The committee directs the County Administrator to formulate budget guidelines for use by departments and agencies in preparation of the county s fiscal year budget for July 23, 2007 Department/Agency computer printouts distributed along with revenue/expenditure justification sheets. August 1-3, 2007 August 10, 2007 August 13-31, 2007 Sept. 1-Oct. 6, 2007 September 25, 2007 October 10-11, 2007 October 18-26, 2007* October 30, 2007 November 13, 2007 Initial meeting dates for the Highway, Sheriff, and Human Service Departments to discuss needs with County Administration. Last day for department heads and/or staff to key in departmental budget(s) request into the computer system. All funding requests shall be in accordance with the budget policy/guidelines established by the County Board and County Administrator. Department Heads, along with other pertinent department staff shall meet with the County Administrator and Finance Director to present and review their 2008 budget request. County Administration to make any final adjustments to the over-all 2008 county budget. County Board consideration of proposed 2008 User Fee Schedules. Finance Committee to conduct budget hearings on the 2008 county budget. Official publication of the proposed 2008 county budget as required by Wis. Stat (65.90) (4). County Administrator s submittal and budget message to the County Board. Budget public hearing and adoption of the 2008 county budget by the County Board of Supervisors. *Not less than 15 days before public hearing. NOTE: New budget personnel requests and/or reclassification requests must be a part of the budget process. All departments must comply with the timetables in accordance with the Personnel Policies and Procedures Manual and/or any applicable bargaining unit contracts. 6/12/07 10