We fear that talking Village finances will immediately scare off a few readers. But stick with us here… Granted, the message to share about the Village’s finances won’t necessarily change your life. Looking at it another way, what the Village is able to accomplish BECAUSE OF our strong financial position allows us to sustain and expand the services that you’ve come to value and enjoy. Indeed, those services impact your life on a daily basis.
Last month the Village’s independent auditors CliftonLarsenAllen LLP presented the results of our 2018 audit. The Village received an “unmodified opinion,” which is the highest form of assurance that can be given by a Certified Public Accounting firm. Basically that means that things look good. The auditors praised our strong fund balance, excellent bond rating, and moderate debt as a few reasons for our clean bill of health. We will try to quickly offer you a bit of context for each of these reasons.
The “general fund” is the Village’s primary operating fund, and we’ve had a strong balance in this account for number of years. This is true of 2018 as well. The Village ended the year with revenues in excess of expenditures of $349,269, which is impressive since we had planned to spend down our balance by almost $635,000. This can be attributed to conservative budgeting practices and a commitment to live within our means.
At the end of 2018, the Village has $3,154,189 in unassigned fund balance in the general fund. These are dollars that aren’t specifically planned for immediate use. This is a significant indicator of fiscal health. Our policy is to be no less than 20% and preferably no more than 25% of the subsequent year’s operating budget. We sit at 33% at the end of 2018. Rating agencies like to see this percentage as high as possible. The Government Finance Officers Association recommends at least two months of general fund operating expenditures be on hand (for us that’d be 16.67%).
Because the Village exceeds the recommended minimum, we are able to consider strategic options to make use of the balance to address the needs of the community. For example, we are advancing our street repair budget to more quickly address the worst of our paved surfaces by using fund balance in addition to regularly budgeted tax dollars.
The Village’s bond rating of Aa2 is strong for a community of our size. The Village receives its bond rating from Moody’s, a nationally recognized rating agency, and this rating was reaffirmed with our most recent borrowing in 2018. On April 5, 2019, Moody’s issued an “Annual Comment on Waunakee”. They stated “Waunakee has a very good credit position. Its Aa2 rating is slightly stronger than the median rating of Aa3 for cities nationwide. The notable credit factors include a robust financial position, a very strong wealth and income profile, a healthy tax base and moderate debt and pension liabilities.”
Finally, let’s touch on debt. The Village has a policy to not issue debt in excess of 50% of the state’s authorized debt limit (5% of the Village’s total equalized value). At the end of 2018, the Village’s outstanding debt was $39,412,813 which is 42% of the state’s limit and 84% of the Village’s limit. The Village has been in compliance with its policy for at least the past several successive years.
Exciting things are happening so far in 2019, including the completion of the new library and the Meadowbrook park shelter, with the Ripp Park tennis court improvements soon to come. Through the first 6 months of the year, we are on track in most of our budget categories. We were hit hard in the early part of the year in the snow and ice category but due to our conservative way of budgeting, we should be able to “weather the storm.” Many of our revenue categories are already ahead of budget including investment income, permit revenue and miscellaneous revenue.
We are starting to look ahead to our 2020 budget. There are opportunities for public input, including at a public comment session on Nov. 4, 2019 and the required public hearing on Nov. 18, 2019. This will be a good opportunity for you and your fellow Villagers to share your thoughts on services and programs. Anyone with questions about the Village’s finances and budget is welcome to contact Finance Director Renee Meinholz at (608) 850-8500 or email@example.com.