City council meets

Draft 2020 budget reviewed, adoption planned in November

{child_byline}By Kim McDarison milton@hngnews.com

{/child_byline}

Draft 2020 budget reviewed, adoption planned in November

{child_byline}By Kim McDarison milton@hngnews.com

{/child_byline}

A draft of the 2020 general fund budget was presented Tuesday, Oct. 15, to the City of Milton Common Council.

City Administrator Al Hulick said in 2019 the city adopted a budget of $4,952,620, representing a 2.09% increase in general fund expenditures over those of 2018. In 2020, the city is anticipating general fund expenditures of $5,065,632, representing a 2.28% increase over this year’s expenditures.

To meet expenditures within the 2020 draft, the city is planning to levy for the maximum allowed by the state, which is approximately $3,385,920, Hulick said.

The presentation of the 2020 draft begins the process towards budget adoption. Next steps include publication of the draft in the Oct. 24 edition of the Milton Courier, followed by a public hearing planned for Nov. 12, after which council, depending on scheduling considerations, will approve and adopt the 2020 budget likely on Nov. 19 or 26, Hulick said.

Growth and levy limits

Under Wisconsin’s Act 55, enacted in 2015, a municipality may only increase its levy over the amount it levied in the previous year by the percentage of equalized value from net new construction. If a community does not achieve new construction, there is no allowable levy increase, Hulick said.

Milton achieved in 2019 an increase in net new construction of 2.54%, equating to $10 million in new construction. The increase defines Milton as the fastest growing city in Rock County. Milton is also the lowest taxed city in Rock County, with a mill or tax rate in 2019 of $9.47, according to Hulick.

With 2.54% net new construction growth, the state will allow the city to increase its legal levy limit by $62,312, Hulick said.

The city’s tax incremental financing districts (TIDs) produced an overall increase of $31.3 million in equalized value in 2019. In 2018, the increase was $18.7 million, Hulick said.

Within the last three years, the increase is over $74.6 million, he added.

“That’s a 21% increase to our overall equalized valuation for the city of Milton. Those are big numbers,” Hulick said.

Expenditure restraint

To qualify for the state’s expenditure restraint program, which would provide the city with an estimated $100,000-plus in state aid for application within the 2021 budget, labeled as “bonus” money by Hulick within his presentation, the city is predicting that the 2020 budget cannot increase expenditures over those incurred in 2019 by more than 3.36%, which would equal $138,000.

According to online information supplied by the Wisconsin Department of Revenue, to qualify for expenditure restraint, a municipality’s non-debt general fund budget increase between this and the previous year must be less than the certified consumer price index (CPI).

A certified CPI for expenditure restraint calculation will be made by the state and released by Oct. 31, Hulick said.

Looking at the two caps: the levy limit ($62,312) and expenditure restraint ($138,000), Hulick said one number outpaced the other.

“The municipality must follow the lower of the two constraints.” This year, that would be the levy cap increase of $62,312, he added.

The city has received the bonus in past years, including: 2016, $95,000; 2017, $115,000, 2018, $122,000, 2019, $114,000, and projected for 2020, $122,227.

Over the years, the bonus has started to decline, Hulick said, attributing that to “a multitude of factors, but the likelihood is that the pool of money for expenditure restraint bonus or incentive, doesn’t really ever change from the state level, it’s how many communities can qualify, and every year, that ebbs and flows. What we presume is happening here is annually more communities are qualifying for expenditure restraint.”

Hulick said the city will not know the final tax rate until mid-November after the final assessment ratio and the expenditure restraint bonus is known.

Goals

Hulick outlined budget goals for 2020 including: creating a balanced budget, staying within levy limits, qualifying for expenditure restraint, maintaining the same level of services and entering into no new borrowing.

Further, Hulick said, the city plans to maintain its employee relations and capital and infrastructure funding levels.

Hulick said the city is still paying 24.4 cents on every tax dollar collected to support debt service from previous borrowings.

City revenue from sources other than taxes anticipated in 2020 include: tax equivalent special assessments, $210,000; intergovernmental revenue, $1,111,260; licenses and permits, $119,833; fines, forfeits and penalties, $55,250; public charges for services, $17,900; intergovernmental charges, $84,119; interest income, $61,150; rental income, $7,200, and miscellaneous revenue, $13,000.

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