The Whitefish Bay Trustees spent the month of October discussing the 2010 Village budget. I have been hesitant to write about the proceedings, because my observations about the budget aren't shared by all.
However, what I write below is material that is from public documents, or spoken during meetings that are of public record: Had you been in the audience, you would know all this already.
The Trustees' discussions have centered around the 2009 surplus, fund balance percentage, tax levy increase, and general spending issues.
In this year, 2009, WFB is projected to have a $750,000 surplus of taxes collected versus budget expenditures. How did that happen? Here's a rough schedule:
* The Police Department budgeted for $35k more than needed for gas. (The outlook for a gallon of gas was quite different in 2008.)
* Street Maintenance - Bids came in $170,000 lower than estimated.
* Debt Service - $100,000 lower than expected due to the decline in interest rates.
* The big miss was $406,000 that WFB earmarked for a capital contribution to NSFD (fire). Turns out that was unnecessary.
* The Trustees will be voting to use $500k to pre-pay a portion of a loan that will save ~$25k/year in interest.
* From 2005-2009, the Village has collected $2.8 million in surplus tax revenue.
So what happens to budget surplus? Surplus at the end of the year, goes into WFB's General Fund Balance. Municipalities' bond ratings are partially predicated on their fund balance as a %age of budget. In 2009, our %age went from 27% up to 34%. In 2004, the Village was warned when this percentage hit 16%, that 20% was a better number.
For reference, the WFB School District has a fund balance target of 15-18%.
As I wrote about a month ago, Trustee Fehring had proposed a unique idea, in that we should use a portion 2009 surplus to zero out the tax levy increase for 2010. The 2010 increase was scheduled to be 2.52%, or about $328,000. Seems like a solid idea. Taxpayers overpaid in 2009, so let's apply some to the 2010 bill, in addition to paying down debt.
However, there is a principle of budgeting, that general fund balance "should not" be used for ongoing future expense, but should be reserved for "one time" expenses. That argument won the day, and the Trustees focused on six "one time" projects to shift from the 2010 tax levy, to the 2009 surplus (fund balance). A single $18k project was knocked out, leaving $146k of 2010 expenses to be paid for by 2009 surplus.
This lowers the 2010 tax levy increase from $328k down to $182k, or about a 1% tax levy increase.
HOWEVER. NOTE WELL: By lowering the 2010 tax levy this way, the PERCENTAGE of tax levy increase from 2010 to 2011 will be higher. 2011's tax levy increase was projected at 4.45%. Because we're lowering the 2010 levy, 2011's projection of 4.45% now becomes 6.15%. 2011's budget stays the same, but it's comparison to 2010 looks worse on a percentage basis. -- Remember, using 2009 surplus saves taxpayers' money, since some of 2010's expenses are paid for by 2009's surplus (fund balance).
The expected 2010 1% tax levy increase is where some stop caring about the story. The original +2.52% increase would have been good, +1% is even better.
I think the prevailing attitude is that as long as there is the belief that Village staff is delivering services properly, and the levy increase is low, then there is no need to economize.
If you compare what was (projected to be) spent in 2009, to what is budgeted in 2010, you get this:
Debt Service: Up $281k or 20.39%
Wages & Benefits : Up $314k or 5.98%
Contractual Services: Up $96k or 1.96%
Equipment: Up $22k or 3.65%
In summary, 2009 (projected) expenses increase 7.2% for what is currently budgeted in 2010.
The increase in Debt Service is understandable .. it is going up because street and sewer reconstruction costs big dollars, and 2010 will be one of the most active years for reconstruction in decade(s). The Village is miles below its debt ceiling, and is doing well in that regard.
Wages & Benefits goes up primarily due to a 10% increase in Health benefits cost, but also includes contractual/union salary increases. To note, the DPW's contract ends in 2009.
It was argued that Villagers like "stability" in their tax levy, increasing at a slow, constant rate. WFB contracts with Shorewood for our shared Health Department. When the 2010 bill came in $10k less than 2009 (due to declining WFB usage), did that $10k trickle through and reduce the tax levy? Nope. Without debate, the $10k was added to the Contingency budget item, to help the 2010 tax bill for residents remain "stable."
Lastly, I will add this, since I proposed it in a meeting open to the public, and of public record. As the Trustees had yet to cut a single dollar from the $13m recurring budget, I made an attempt, and proposed trimming 25 line items in the amount of $77k -- none of which would have had any material impact on any service in the Village. My goal was to tighten up the numbers and reduce the taxpayer bill. This package of cuts was dismissed.
As you may be able to divine, I've been frustrated with this, my first budget process. I do not believe the budget has wasteful spending, but I don't believe there is any belt tightening, either. I realize there is a trade-off for economizing yearly versus "stability" in future tax levy increases. I'm fine with that. It's harder to explain, but the taxpayer comes out ahead in real dollars.
Tomorrow, Monday, November 16th at 7pm, there will be a Public Hearing on the 2010 Budget, where any member of the public may speak. Copies of the budget are available at Village Hall. The budget is up for final passage following the hearing.