City of New Richmond: Sitting in on the 2018 budget tour
The City of New Richmond's 2018 Budget Tour made a stop at the New Richmond News office Wednesday, Oct. 18. Presenters Police Chief Craig Yehlik and City Finance Director Rae Ann Ailts spent 45 minutes with newspaper staff explaining the process the City used to arrive at the 2018 budget numbers, soliciting input and answering questions.
"We're about 25 percent of our way through our community engagement schedule. Last night we went to the VFW where we had more than 40 people attend. That was a great atmosphere with lots of good feedback and energy. This is really the most exciting part of our budget process, being able to get out into the community to collect your feedback and see how we're doing as a city and what we can do better," said Ailts.
Ailts and Yehlik took turns reviewing highlights from 2017, explaining the budget process and describing the themes that guided the formation of the 2018 budget.
2017 highlights included infrastructure work on the north side with the North Fourth Street project, sidewalk and trail improvements throughout the city including partnerships with the county on the 140th Street project and surrounding townships on the 125th Street project.
Ailts noted the city has seen 85 new residences built so far in 2017 and has experienced a steady population growth rate of 7 percent, or 514 residents since 2012. The City's equalized value (total value of residential and commercial development) is continuing to rise steadily, a trend it has followed for the last five years.
Yehlik added that four downtown businesses have taken advantage of the City's façade grant program so far in 2017 and that the downtown area in general has benefited from the addition of public artwork and new, artful, bicycle racks as a result of a partnership between WITC and Fusion Metals.
Yehlik summarized the efforts of both his department and the fire department to become more proactive in building healthy relationships with all community members through programs like National Night Out, National Fire Prevention Week, the Civilian Response to Active Shooter training, and by visiting schools and other civic organizations. He pointed to the fund raising efforts of the department, which have exceeded the original goal of $50,000 by $25,000, in support of the new K-9 officer position as evidence of the improving relationship between his department and community members.
Ailts added examples of other collaborations and partnerships which continue to play an essential role in the success of the city including the sale of the Commons building to the City (eventually to become the home of the new library), the John Doar History Trail, and the New Richmond Recreation Partnership, a collaboration between the City, the school district, The Centre and the New Richmond Area Community Foundation to develop a means to broker all activity information including youth sports, performance and entertainment opportunities in a single public portal.
Yehlik explained the budget process.
Department heads meet with their staff to evaluate department needs. Next, department heads join together to look at how those budget needs align with the budget vision and the city's mission.
This year's budget vision states, "The City of New Richmond strives to bridge our heritage with our current and future needs of our growing community."
To go along with the budget vision, the City developed seven themes to help departments accomplish the budget vision: Health, Safety and General Welfare; Preserving the Past; Engaging the Present; Ensuring the Future; Economic Development; Fiscal Responsibility; and Public & Private Partnerships.
The budget is created by prioritizing various department needs while keeping in mind where the City needs to be financially.
"Not everybody gets what they want, but we all seem to get what we need," said Yehlik.
Next that budget is taken out into the community to obtain residents' input and feedback. The City is currently midway through that process of engagement. Once the community's input is secured, it is considered, changes are made if needed, and the budget goes before the City Council for approval.
Ailts and Yehlik made the case for a growing demand for services in the city. Taking into consideration the new bridge and growing population, the need for all services from police and fire to utility infrastructure to streets, the airport, the library and parks and recreation, will all continue to increase.
Yehlik noted that his department experienced a 25 percent increase in calls from 2016 or an additional 800-call increase in one year.
To meet those increasing needs also requires routine equipment maintenance and repair.
Meeting all of those needs requires more money.
To be fiscally responsible, the city looks for common sense as well as innovative ways to offset those costs. Over the last two years the City has received more $300,000 in grants. The City has also brought management of street and utility projects in-house rather than contracting out to save money. The city has maintained consistent staffing levels for the past five years by asking employees to do more to keep costs down. A gravel bed nursery has saved the city thousands of dollars in tree purchasing costs ($300 per tree). The City collects a hotel room tax, which is used to pay for specific events like the Hillside Series, Fun Fest, youth hockey events and various parades.
Ailts pointed out such savings measures combined with collaboration between departments has resulted in the City spending less on operating expenses in 2017 than it did in 2012.
The City's Fund Balance, funds held in reserve available for unrestricted spending, consistently exceeds the recommended two months worth of operating revenues coming in at 25-30 percent. That allows the city to borrow money at better rates. It is also money available to deal with any kind of unforeseen catastrophic event.
Ailts took a moment to breakdown how a taxpayer's dollar is spent in New Richmond.
• 47 cents goes to the school district
• 34 cents goes to the City
• 16 cents goes to St. Croix County
• 3 cents goes to WITC and the State of Wisconsin
Ailts further explained how the 34 cents going to the City is spent.
• 19 cents goes to the operating budget (services - police, fire, library, airport, administration, economic development, etc.)
• 12 cents goes to debt service (loan payments)
• 3 cents goes to tax increment districts
• Less than 1 cent goes to capital replacements
Capital improvements include everything from street construction to new equipment like squad cars and fire trucks. Ailts explained that the City's five-year capital improvement plan is actually reviewed every two years and currently has identified more than $33 million in projects to be addressed over the next five years. What makes the City's capital improvement plan unique is that it is developed in consultation with the school district and other organizations to identify areas of mutual interest where funds might be saved or consolidated in the name of fiscal responsibility and keeping taxes in check.
The traditional way cities pay for those large expenditures, in addition to grants and cash, is by borrowing money, loans.
Ailts confirmed that is the approach the city uses currently but New Richmond also uses a more aggressive amortization schedule electing to pay back loans sooner in 15 years, rather than the standard 20-year schedule.
To conclude the presentation, Ailts introduced a new option that the City is studying as a way to pay for large projects with cash versus loans. It calls for a capital "savings" plan in which taxpayers could opt to pay more in taxes today to build up a cash reserve to be used to pay for future capital improvement projects upfront avoiding the need to borrow, a pay as you go philosophy.
Ailts armed audience members with three stickers.
With two of the stickers valued at $500,000 each, they were asked to prioritize spending categories from a list of numerous capital improvement options such as parks/trails/recreation, new library, vehicle fleet management, airport and street improvements.
With the remaining sticker, they were asked to vote for one of four payment options for those projects:
• Option 1 — keep the status quo, leave the current system of borrowing to pay for improvements later in place, leave the tax levy alone;
• Option 2 — Increase the tax levy by 1 percent to 6.93 percent (2018 levy is estimated to be around 5.9 percent) to set aside/save $50,000;
• Option #3 — increase the levy to 7.7 percent to save $100,000;
• Option #4 — increase the levy to 8.93 percent to save $150,000. Roughly estimated, for a typical home in New Richmond, the options could cost the homeowner from $8 - $10 a month more in taxes.
Ailts' office plans to study the results of these questions as they come in from the ongoing community engagement sessions to formulate a future recommendation to the city council.
The City's budget tour continues through early November. For schedule information on upcoming stops, contact City Administrator Mike Darrow at 715-246-4268 or by email at firstname.lastname@example.org.