Editor’s note: The city council held a budget public hearing yesterday (Nov. 13). The hearing was held after the Milton Courier went to press.
The public will be given an oportunity Wednesday to address the proposed City of Milton 2020 budget. Council will also consider and potentially take action regarding a 2019 tax levy adjustment as part of a plan proposed by Finance Director Dan Nelson to more quickly pay down debt associated with a 2007-initiated borrowing.
The public hearing will be held at Milton City Hall, 710 S. Janesville St., at 5 p.m.
The City of Milton Common Council heard on Nov. 5 an update regarding the proposed 2020 city budget and a separate proposal to pay down city-held debt at an accelerated rate by adjusting the 2019 tax levy. The proposal calls for tax levy increases over the next four years.
A draft of the proposed 2020 budget was originally presented to council during its meeting held Oct. 15. During that presentation, City Administrator Al Hulick cited Nov. 19 as a likely date when council will approve the finalized budget.
Offering several balance sheets and estimates, Hulick began with a budget history, comparing revenues with expenditures between 2019 and 2020. According to Hulick, the approved budget in 2019 was $4,952,620, and the proposed budget for 2020 is $5,063,006, representing an increase of $110,386 or 2.23%. The largest revenue sources used to support those budgets came from property tax collections (the tax levy), which was $3,289,755 in 2019 (supported by taxes levied in 2018) and will, with the adoption of the proposed 2020 budget, go up by $96,442, or 2.93%, to $3,386,197 (supported by taxes levied in 2019).
Looking at overall expenses between the approved 2019 budget and the proposed 2020 budget, Hulick said general government expenses, including monies used to support city hall, municipal court, elections, and other related costs, decreased by 0.36%, from $836,426 to $833,399.
Public safety costs, including law enforcement and fire protection, increased, from $1,652,237 to $1,733,599, or by 4.92%.
Cost generated through the city’s department of public works also increased, from $813,581 to $844,075, or by 3.75%.
Costs to run the city’s cemetery saw no adjustment, running steady at $3,700.
Under the category of Culture, Recreation and Education, including parks, celebrations, historic preservation and economic development, the 2020 budget saw an increase of 7.27%, from $254,102 allocated in 2019 to $272,569 earmarked for 2020.
Under the heading of Transfers, the city spent $850,000 on debt service in 2019, and is scheduled to spend $825,000 in 2020, representing a decrease of 2.94%. Capital expenditures stayed the same in both budgets at $254,350. The library fund will see an increase of 2.81%, from $288,224 in 2019 to $296,314 in 2020.
Looking at the “Top 10” expenditure categories as a percentage of the total budget, Hulick identified the following: wage and benefits, 51.87%; debt service, 16.29%; fire department, 7.74%; capital expenditures, 5.02%; utilities, 3.93%; property/liability/worker comp, 2.04%; road salt, 1.40%; legal/attorney, 1.24%; technology/internet, 0.79%, and assessor, 0.64%.
Looking at costs within the proposed capital expenditure budget for 2020, Hulick noted the following: one-ton dump truck replacement, $65,000; park table replacements, $4,000; utility trailer, $1,900; exterior work needed for the Community House, $7,000; park safety upgrades (replacing sand with mulch underneath play equipment), $5,000; tree removal, $8,000; the creation of two bicycle stations, $10,000; building safety upgrades, $15,000; library roof repairs, $28,450, and Elizabeth Street resurfacing, $106,000. A “Tough Book” laptop for a mechanic was also listed, but, Hulick said, a replacement had been found, leaving $4,000 to be reallocated.
Looking at additional funding (non-tax levy) sources, Hulick noted the following allocations: $134,300 coming from the city’s wheel tax will be used to improve the following streets: High Street, between Chicago and John Paul, Sunnyside Drive, Homestead Drive, Green Hill Circle, Garden Lake, Wallace Way and Larch Lane. Parks Fund monies of $3,600 will be used to purchase swing sets in Liberty and Central parks. Water utility funds in the amount of $202,874 will be used for meter reading technology, meter, water valve and hydrant replacements, and some monies will be spent on a used utility pickup truck. Stormwater utility funds, in the amount of $75,000, will support Rock County Clean Sweep programming, a South Janesville Street ditch, and storm sewers on Greenman Street.
Debt reduction proposal
Nelson presented council with a proposal to help pay down city debt more quickly. He described the proposal as short-term pain for long-term gain, noting that his plan would impact the city’s annual tax rate.
Information posted on the city’s Facebook page notes the current mill rate (used to calculate tax bills in 2018) in the city of Milton is $23.34. The number includes all the taxing rates of applicable jurisdictions, including: the state of Wisconsin, Rock County, Blackhawk Technical College, the Milton school district, and the city.
In the city of Milton, using the current (2018) mill rate, taxpayers pay $23.34 for every $1,000 in property value.
The city collected, in 2018, $9.47 per $1,000 in property value as its tax rate or portion of the full mill rate.
This year, with the adoption of the 2020 budget as presented, that number is anticipated to rise to $9.71.
In a memo to council, Nelson wrote, in 2007, the city borrowed $4.9 million for public projects to be paid back over a 20-year period. The borrowing, in the form of a bond, was refinanced in 2016, with a payment structure leaving a final payment of $215,000 due in 2027. The terms of the bond’s refinancing allow for early payoff beginning in 2023. To achieve that goal, Nelson wrote, the tax levy could be adjusted between the budget years of 2020 and 2023.
While tax levied dollars used to pay the city’s current debt service are scheduled to decrease slightly over the next several years, the city could instead opt to increase those dollars to save the $215,000, Nelson wrote.
Tax dollars used to fund the 2020 budget will come from tax dollars levied in 2019. Using a revised levy schedule, beginning this year, the city’s tax rate would increase until 2023, and the full payment of $215,000 would be saved by 2026, allowing the debt to be retired a year early, with the added bonus of saving $15,480 in interest, Nelson noted.