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Somerset Village Board: Trustees approve long range financial management plan

Somerset

Ehlers Inc. municipal advisor Sean Lentz walked Somerset Village trustees through a proposed financial management plan which would guide village finances for the next five to 10 years.

"We've been working on this for the greater part of a year. In its simplest terms, what we're trying to do is assemble a list of capital improvement projects and other activities that the village is anticipating happening over the next couple of years and forecast out what the financial impact will be of putting those projects in place. If debt is issued, then what impact will having to pay that back over a period of years have on the village's financial capacity? What we're trying to look at is, are the projects affordable within the context of village finances and are the tools you have available to do the projects, rates, charges and tax levy, available in enough quantity," explained Lentz.

Lentz noted that in discussions over the past year with members of the finance committee, the list of potential capital improvement projects had been whittled down to a more practical number, making a financial plan more realistic given projected revenues.

The Ehlers plan reported that despite the declining value of property in recent history, TID values, both in and out, took a positive jump in 2015. The plan assumes a conservative growth rate of 2 percent going forward. The prioritized list of capital projects from 2017 through 2020 is divided into three categories: general, water and sewer. The plan calls for tax levy funds to pay for general projects and utility rates and charges to pay for water and sewer projects. New projects will be financed over periods of between 10 and 20 years, depending on the type of project and the tools available to finance them. Those tools include a combination of general obligation debt and water and sewer utility revenue bonds.

According to Lentz, the current annual debt payment carried by the general fund is about $210,000 for the next five years, after which it begins to decrease. The plan calls for adding the new capital improvement projects gradually over a period from 2017 to 2020, eventually increasing the debt payment to $360,000 in 2021-22. The mill rate for the current tax levy is $1.25 per $1,000 of value in a home. The plan calls for, with the addition of the cost for the new capital improvement projects, the projected mill rate to increase steadily to a rate of $2.09 per $1,000 by 2021.

Lentz noted that that the village "savings account" has gotten tighter over the past couple of years, falling below the recommended 25 percent of the village's annual expenditures. Not having adequate funds in reserve affects the village's bond rating adversely. It also limits cash available for emergency situations and cash available to pay bills between tax collection at the beginning of the year and mid year. The financial plan predicts that the sewer utility's continued ability to pay back loans made to it from the general fund should steadily improve that savings account along with continued growth.

Trustees unanimously approved the proposed financial management plan.

ATVs

Marty Hobble, spokesperson for the newly-formed Somerset ATV Club, presented trustees with a plan for opening up specific roads within the village's jurisdiction to ATV traffic.

"We approached Somerset township to get township roads opened up, and with the forming of the club and proposals to the township, the township agreed to open the trails up. This excludes county, state and federal highways," explained Hobble.

According to Hobble, all of St. Croix County is now open to trails except for Hudson township.

Hobble explained the purpose of establishing these routes through the village is primarily to link up with trails outside of the village limits and to provide access to food and fuel.

Trustees agreed to review Hobble's proposal in consultation with Police Chief Sirovotka.

Other business

• Trustees approved Refuse Collection and Recycling Ordinance A-636.

• Trustees approved Ordinance A-637Z — Rezoning parcel 181-1004-30-000, 403 Schachtner Street, from a Two Family District to a Twin Home District.

• Trustees approved 2017 Special Fund budgets, 610 (Water), 620 (Sewer), TIF District 2.

• Trustees approved a 2016 Levy Resolution Amendment.

• Trustees agreed to renew the village's General Liability and Workers Compensation insurance policy with a premium increase of $1,000.

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