2016 budget message

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FOND DU LAC COUNTY EXECUTIVE

ALLEN BUECHEL

 

2016 BUDGET MESSAGE

October 20, 2015

 TO THE HONORABLE FOND DU LAC COUNTY BOARD OF SUPERVISORS:

 Pursuant to my responsibility and authority under Chapter 59 of the Wisconsin State Statutes, I present to you the proposed Fond du Lac County 2016 budget.

 The proposed budget that I am presenting to you provides adequate funding for the County to continue the same level of service in the areas of public safety, maintaining the county road system, providing services to the most vulnerable residents in the County and allows the County to adequately continue operations through 2016.

 While there were no significant revenue reductions in the state budget that affect counties, there are also no revenue increases.  That continues to make budgeting more difficult because counties like all municipalities are still under the property tax freeze and costs continue to rise in many areas.  This budget was more difficult to develop without cuts in services or personnel, due to cost increases in several areas.  The need for mental health services has impacted the Jail, the Department of Social Services and the Department of Community Programs budgets.  In addition to that, in the Jail, staff turnover and temporary vacancies have resulted in a significant increase in the need for overtime, in addition to a growing demand for medical care of our prisoners.  In the Department of Social Services (DSS), out of home placements of children is putting further cost pressure on the levy for that departmental budget.  The DSS staff has been working to divert as many children from out of home placement as possible; however, there continues to be a growing need for more and more services for children and for families.  The demand for mental health services in the Department of Community Programs (DCP) is increasing costs in that budget.  Also, the County’s attempt to recruit a fourth psychiatrist for the last several years has been unsuccessful.  The situation would become even more critical if one of our psychiatrists would choose to retire or leave county employment.

 There are not many options available without recruiting an additional psychiatrist.  We have found that our attempts at recruiting a psychiatrist have not been successful in part because of our lower rate of pay.  Other healthcare providers are paying significantly more than what Fond du Lac County offers.  I am proposing in this budget that the psychiatric pay be adjusted as well as the pay for the pathologists in the Medical Examiner’s Office because the competition for doctors in both of those professions is becoming more intense year after year due to retirements and an inadequate number of young doctors going into those specialties. 

 Financial impacts in this budget include new construction growth which for 2015 was 1.22% compared to 1.39% in 2014, and total equalized value did rise 2.06% versus 1.76% last year, that equates to an inflationary increase in property values of a meager .8%.  The state retirement rate for employees decreased by .2% of wages resulting in a savings of a little more than $65,000 for 2016.  Hopefully the stock market recovers from the current downward trend and continues to rise in future years, because the rates for state retirement are based on the average performance of the stock market over the previous five years.

Harbor Haven Health & Rehabilitation

 The largest project being funded in the proposed 2016 budget is the continuation of the remodeling of the second floor at Harbor Haven Health and Rehabilitation in the Fond du lac County Health Care Center building.  There are four separate units on the second floor and this project is being phased to cause minimal disruption to the residents in the operation of the facility.  The Highway, Airport and Facilities Committee have awarded the bid to Jos Schmitt and Sons Construction to begin the work as soon as all legal documents are signed.  One of the nursing home units is presently vacant in preparation of the remodeling and as soon as that unit is completed, residents will be moved to the new unit in order to begin the remodeling of the additional units.  This will occur throughout 2016 and possibly into early 2017.  We want to get this project started immediately because each day of delay now will cause a delay in the opening of the last unit which could have a minimum $1,000 of lost revenue at the end of the project for each day the units are not open.  There was $900,000 budgeted in the 2015 budget and there is an additional $1,550,000 budgeted in the proposed 2016 budget, with a final amount of up to $750,000 to be included in the 2017 budget.  We are undertaking this project because it is in the economic best interest of Fond du Lac County to do so.  As a result of the changes that have been made at the facility on the first floor, the annual levy support for Harbor Haven Health & Rehab has dropped from approximately $1,200,000 to about $500,000 for last year.  That is a direct result of having 13 private rooms available and a very attractive facility for people to choose for their in-patient therapy services.  However, as the residents need longer stays, they sometimes leave our facility for another facility because only two private rooms are available on the second floor and that floor is not as attractive or as welcoming as the first floor.  That is why we need to move forward with the second floor remodeling.  Mark Radmer, Harbor Haven Health and Rehab Administrator has been tracking the individuals who have chosen not to come to our facility for two reasons, one of which is the lack and availability of private rooms which will be provided for in this remodeling, as well as the attractiveness of the facility on the second floor.  Once the remodeling is complete, the facility will decrease from 117 beds to 85 beds, but providing for a total of 33 private rooms.  By downsizing the facility, operating costs will also decrease.  Fewer residents mean a reduction in food and laundry costs.  If the unit is properly staffed, it will also provide for a significant reduction in staff costs.  Projections have been developed that show that if the project is completed in 2017, there should be a further reduction in county levy support for the facility in future years.

 Voice over Internet Protocol (VoIP) Telephone System

 Fond du Lac County purchased its existing analog telephone system in 1999.  While it still continues to serve our needs, it is getting near the end of its life.  After evaluating the system, the recommendation of county staff has been that we move to a Voice over Internet Protocol (VoIP) telephone system.  It was hoped that we could transition to the new system in 2016; however, there have been delays in getting the wiring installed so that the project can be completed.  I expect the wiring project to continue in earnest by the first of the year.  We have to wire all the major county buildings and that will take time to complete.  There is approximately $175,000 available in fees that have been collected from departments as revenue for the ultimate replacement of the system.  In addition to that, I am proposing another $200,000 in the 2016 budget to complete the wiring, followed by purchasing and installing the infrastructure to support the system.  I anticipate we will need to budget another $100,000 to $200,000 in the 2017 budget to buy all the actual telephone equipment to transition to the system in the first quarter of 2017.  If approved, I will be directing county staff to make every effort to assure this system is operational by April 1, 2017.

Technology upgrades

We continue to modernize our technology which as we all have witnessed, has a short life span.  We are budgeting $350,000 to replace the Positron phone system that supports our E911 telecommunications phone system.  Also, I proposed $390,000 to upgrade the network switch infrastructure by the Information Systems Department, and I am also proposing that we budget $150,000 more to complete the CMHC software replacement project which will support both the Department of Social Services and the Department of Community Programs for their client tracking, case management, appointment calendaring and medical records.  Our CMHC software is obsolete and will no longer be supported by 2017.  Also included in the Sheriff’s Office budget is $275,000 for a virtual training range for training police officers in circumstances as near to real life as possible.  This system will be installed in the basement of the Jail and the Sheriff stated that this training opportunity will be offered to other police agencies within the county to increase the proficiency of officers, not only of the Sheriff’s Office but the other departments in the county.  This investment will save the cost of traveling out of county for that type of training and thereby reduce overtime.  In addition, it is a much smaller investment than building an actual training facility in Fond du Lac County.  Officers will still need to have weapons proficiency training which can be provided at the existing outdoor range in the Town of Byron.

 Highway Department projects

The largest highway project for 2016 is the completion and partial reconstruction of County Highway I that runs parallel to Highway 41 from Highway 23 to Highway N.  By the end of the 2015 season, the newly constructed areas will be complete as well as all culvert replacement, shoulder widening and ditching.  The road will still have blacktop available for the winter driving season.  As weather permits in 2016, the asphalt will be milled and overlayed with new asphalt.  The road project will be completed by fall of 2016.  The next major project that will be undertaken will be Pioneer Road from the Hickory Street round about past the Mercury Marine complex and will include the intersection of Military Road.  The proposed 2016 funding for this project should provide for design, right of way acquisition and movement of utilities in preparation for the project reconstruction to occur in 2017.  The Highway Commissioner is pursuing some additional grant dollars that would help reduce the local share of that project.

 Proposed new highway garage.  In 2015, this county board approved the purchase of more than 37 acres near the intersection of Highway 151 and Hickory Street and approved the acquisition of an additional 2.24 acres on the northeast corner of that property.  The funds for that additional purchase are included in the proposed 2016 budget.  All funding for the 37 acres was included in the 2015 budget.  Since the county board approved the additional 2.24 acres purchase, it is expected the board will support the $100,000 to be included in the 2016 budget.  I have also proposed $50,000 be included for preliminary engineering work that may need to be done on that site; however, I am proposing that we wait for the actual construction to begin no earlier than 2020.  That would give Fond du Lac County more time to make all decisions regarding the scope of the new garage complex.

First floor remodeling project

The City of Fond du Lac had approximately 3,400 square feet of surplus office space on the first floor and has asked if the County would have need for it.  We evaluated what needs we may have and coincidently the State Public Defender’s Office was granted two new attorney positions and a support position for their office.  They now rent space from the county on the third floor of the City/County Government Center.  The Public Defender’s Office barely has adequate space for their current staff and if they were going to continue to rent from us would need more space.  That is why we looked to the area on first floor.  The City/County Building Board agreed to transfer that City office space to the County effective with the new budget and I am proposing that we remodel that area to provide space for the expanded Public Defender’s Office with approximately 500 square feet for another office to be designated later.  The estimated cost of that remodeling project is $130,000; however, the County would increase its revenue for rent from the State based on the new square footage.  The annual rent per square foot is $14.00 and the Public Defender will need approximately 2,900 square feet as opposed to 1,800 square feet, providing an increase in revenue from $24,000 to $40,000.  If all goes as planned, the space should become available for rent by April 1, 2016.

New Positions

While there were two part time positions, one in the Land Conservation Department and one in the District Attorney’s Office requested, as well as one full time position in the Health Department, I have only included the full time position of Health Educator in the Health Department in this budget.  That position is funded to begin September 1, 2016.  The Health Educator position will replace part time RN hours which are much more expensive on an hourly basis.  Kimberly Mueller, Public Health Officer believes that providing health education is a core service of her office, and she would rather emphasize health education over direct patient services that can be provided by other health facilities.  In addition, I am proposing several position reclassifications in this budget that will more accurately reflect the changing responsibility of some individuals.  Plus we need to address the fact that attracting and retaining staff for our Information Systems Department has also become very competitive.  I, therefore, am recommending a pay progression series be adopted in order to be more competitive to maintain competent staff in that department. 

Wellness efforts

As you are aware, Fond du Lac County received for the fourth year in a row, the award for being one of the healthiest companies in the country because of the excellent scores earned on our employee Health Risk Assessments.  Erin Gerred, Director of Administration has been leading the County’s wellness efforts along with some very enthusiastic individuals, that are having an impact on employee wellness and therefore on our medical insurance premium renewal rates.  In 2015, our rate increased 1% which followed a 1% in 2014 and a 2% in 2013.  For 2016, our rate would have increased 1%, but because we changed the potential out of pocket maximum for our employees, we actually received a 1½% decrease in our insurance premium rates which resulted in a savings of $250,000 from what was expected to be required for 2016.

Wage increase

I am including in the salary contingent fund, dollars for a .5% increase for all county employees for 2016.  I had hoped to do more, but that is all the funds that were available.  I am still very concerned about the county’s ability to attract and retain employees because our wage increases are no longer keeping up with the private sector.  Since Act 10 when employees began paying the employee share of state retirement which will now be 6.6% of salary, our wage increases have not kept up.  Fond du Lac County wage increase for 2011 was 0, for 2012 and 2013 .5%, for 2014 1½% and for 2015 2%.  But still for many of our employees their take home pay is below what it was in 2010.

Investment in the future of Lake Winnebago

The summer of 2010 produced a great deal of vegetation on Lake Winnebago which created public concern regarding the overall health of Lake Winnebago.  After several public meetings, Fond du La County applied for and received a DNR planning grant which supported the creation of the Lake Winnebago Quality Improvement Association to address concerns on the south end of Lake Winnebago.  Simultaneously, efforts to address concerns from a watershed perspective were underway through a collaborative county initiative funded through an additional grant from the DNR which identified a need for a coordinated effort to improve water quality in the watershed which includes Lake Winnebago, Lake Butte des Mortes and Lake Poygan.  As a result of this collaborative effort, and if all three county boards approve, an investment of $15,000 from each county would be made to contract for the continued coordination of all lake activities that focus on the health of the Lake Winnebago watershed.  Calumet, Winnebago and Fond du Lac Counties all recognize the importance of Lake Winnebago to our economy and our quality of life.  We have the world’s largest manufacturer of boat motors in Fond du Lac and it would be a shame for the health of that lake to continue to deteriorate.  One of the needs that have been identified by this multi-county group is to update the lake management plan to map out the focus of future actions.  The group will continue search for grants to update the plan which was last updated 20 years ago.  The group also concluded that while there were many efforts being undertaken around the lake there was little coordination which resulted in the recommendation of contracting for a part time Lake Coordinator to work with all the counties and organizations around the lake.  It was requested that $15,000 be included in each of the three county budgets to fund that contract and I have included the $15,000 in the proposed Land Conservation budget as Fond du Lac County’s share. 

Lake DeNevue drainage plan

After several meetings with Legislators, area residents and town officials regarding the flooding issues on Lake DeNevue caused by storm water runoff being channeled through one culvert under Highway 45, I am recommending $25,000 to fund a cooperative effort with the state to hire an engineering firm to develop a new drainage plan for the Highway 45 area that feeds into Lake DeNevue and causes flooding there.  Over the years, there have been many alterations to the drainage system east of Highway 45.  What this engineer will be doing is to identify possible alternatives by diverting some of the storm water away from that Highway 45 culvert and through other drainage ways to the DeNevue Creek west of Lake DeNevue. 

Sales Tax Revenue and Allocations

The budgeted 2016 sales tax revenue is $7,410,448.  We have seen sales tax revenues increase approximately 3% per year and we anticipate that trend will continue as the economy continues to grow.  Those dollars have been allocated for 2016 as follows:

             $2,445,105 debt service on the Mercury Marine and Alliance Laundry Systems loans.

            $2,800,000 for Highway projects.

$677,093 for economic development including $300,000 more for the Fond du Lac County Economic Development Corporation Revolving Loan Fund.

            $1,488,250 for other capital projects within the county including an additional $150,000 to replace the client services software system for the Human Services Departments.

Additionally, $439,666 of unapplied sales tax revenue through 2015 is projected to be carried over to 2016.

Summary

The 2016 proposed levy is $42,279,781 as compared to $41,410,693 or an increase of $869,088 including debt service payments.  Equalized value increased 2.06% to $6,909,400.  The tax rate of $6.11 remains the same as 2015.  Also, to meet this budget I am proposing that we apply $1,900,000 from the unassigned general fund reserve that resulted from surpluses in the 2014 budget.  That compares to $2,000,000 for the 2015 budget.  Our undesignated reserve is projected to remain flat as compared to year-end last year.  We have had the practice for more than 25 years of applying the previous year’s surplus to subsequent year budgets and to maintain a stable unassigned undesignated general fund to protect our cash flow and our bond rating. 

This proposed budget includes other areas of service to the people of this county that are too numerous to mention here.  The State of Wisconsin requires counties to provide a whole host of services from the Courts to the Jail to Human Services to Highway Maintenance and other areas.  Most of the funding from the State has either slightly decreased or has held steady over the past number of years making it more challenging for the counties to continue to provide the services that one the State requires, and two, that the citizens of our county expect.  Through the hard work of my department heads and the elected officials, we continue to provide the services that the citizens expect as we continue to search for ways to reduce costs and in some cases enhance revenue wherever possible.  Because of the dedicated department heads, elected officials and employees that we have in Fond du Lac County, we have traditionally provided a very high level of service at a good value to the citizens of the County.  It is my goal and their goal that we continue that tradition. 

I wish to thank Erin Gerred, Director of Administration, Karen Kuehl, Director of Finance, Tammy Pinno, Assistant Finance Director, Stacie Kraus, Fiscal Services Director, Chris Daleiden, Highway Accounting Manager and their staffs, and all the department heads and elected officials for their assistance in compiling the 2016 budget. 

Respectfully submitted,

Allen J. Buechel

County Executive