St. Croix County budget goes to full board Oct. 31
After three days of hearings and more juggling by administrators who chopped $2.4 million from budget requests, St. Croix County Finance Committee members thought they were close to a 2007 budget that would work.
Then last week they got bids for health insurance and suddenly found themselves, using the words of Finance Director Michelle Pietrick, with "a total hole" of $351,358.
Last Thursday the committee voted to tap the county sales tax fund to cover that hole and restore the contingency fund to a comfortable level. The budget adopted by the committee will be presented to the full County Board Tuesday, Oct. 31.
Administrative Coordinator Chuck Whiting said finance workers had expected a 10 percent increase in health insurance costs and built that into budget proposals. But when insurance company proposals came, the lowest estimate was $307,075 higher than anticipated.
Whiting said the premium increase for union workers, the largest group of county employees, was 8.7 percent. But the increase for non-union workers, a group of about 180, was 36 percent.
The county self-insures for health benefits. Therefore the money allocated for insurance goes into a fund to cover claims, administration costs and stop-loss insurance. Stop-loss coverage is for claims of over $75,000 per person or $7.34 million for all employees.
Because of state-imposed tax levy limits, the county was held to a property tax increase of 4.974 percent plus payments on some debts, bringing the total levy increase to 5.65 percent or $1,258,329 more than the 2006 levy.
The county budget is also funded by many other revenues. The total budget will increase from about $86 million to $88 million, said Whiting.
Although there were several requests for new positions, the only one approved by the Finance Committee was a coordinator for the drug court program. A little over $65,000 is budgeted for that worker.
Borrowing for projects
The Finance Committee is recommending that the County Board borrow $286,000 to pay for a series of capital projects. Included in that is $161,000 for several Information Technology Department projects, $110,000 for a new phone system for the Health and Human Services Department and $15,000 to replace a parking lot.
This borrowing is outside the levy limit, and -- since repayment won't begin until 2008 -- is not included in the 2007 budget.
"We really don't want to accumulate too much debt, but most of the items we're borrowing for have a long asset life," said Whiting.
Last Thursday, Supervisor Daryl Standafer urged restoring the county's contingency fund to $250,000. In September, the committee had reduced the fund by $57,000 to balance the budget.
Taking money from that or other funds is just "kicking the can down the road to another year," warned Standafer.
And, he said, indications are that the county's levy limits will be even tighter next year.
"We have X amount of money and our challenge is now not to spend more than Y of expenses," Standafer summarized.
Mill rate down, taxes up
The budget as proposed will cut the county's mill rate by almost 5 percent, said County Board Chairman Buck Malick.
But the gross amount of taxes collected will still be higher, responded Standafer.
Malick suggested taking over $400,000 from money accumulated in the county's sales tax fund to cover the holes in the budget and restore the contingency fund to $250,000.
Supervisor Tom Caflisch agreed. Cutting another $351,000 from the budget is probably not doable, he said.
If that could have been done, it would have been done in the three days devoted to budget work, said Caflisch. He suggested the committee "not torpedo" three days of work.
The sales tax fund has grown to over $500,000 -- partly through unexpected payments from the state last year.
The committee agreed to apply $412,453 from that fund to the 2007 budget.
When the county received that unexpected money, supervisors agreed not to consider it "found money" and not to simply spend it, said Standafer.
"Now we just grabbed it and spent it," he said.
"Well, we were pretty desperate," responded Malick.