2017 budget message

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FOND DU LAC COUNTY EXECUTIVE

ALLEN BUECHEL 

2017 BUDGET MESSAGE 

October 18, 2016 

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 hereby present to you the proposed Fond du Lac County 2017 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 continue operations through 2017.

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 state imposed property tax freeze and costs continue to rise in many areas.  This budget was again difficult to develop without cuts in services, due to cost increases in several areas. 

The increasing need for mental health services has resulted in our recruitment of two new psychiatrists in 2016.  One replaced a retiring doctor, the other brings us back to four psychiatrists in that department.  The cost for psychiatrists has increased significantly and in order to recruit a psychiatrist we needed to increase the compensation level and that has put a significant upward pressure on the levy demand for the Department of Community Programs.  In addition, the Drug Court Grant is expiring and funding is only available through February 2017.  Because of the many individuals and agencies involved in the Drug Court Program, I am recommending that we continue funding that program with county levy for next year.  A levy increase was required for residential care of individuals served by the Department of Community Programs as well as for a state mandated Crisis Coordinator and therefore all of our available levy increase for next year is going to support the increases in the Department of Community Programs.  Most of the other departments had a minimal increase in their levy and some had a decrease.  All of those changes were discussed with the affected department heads.  The Department of Social Services levy increased by $16,715 in this proposed budget despite the increase in demand in that department.  The Sheriff’s Office is proposing only $60,000 for two new vehicles in 2017 rather than replacing 11 at a cost of $352,500 in the fleet which reduced that levy, allowing for funding increases in the Jail and other departments.  The Jail population has unexpectedly leveled off.  The Sheriff is recommending that his Jail Administrator move forward with housing additional prisoners from the state of Wisconsin which has allowed us to increase the revenue in the Jail budget.

Other financial impacts in this budget include net new construction growth which for 2016 was 1.49% compared to 1.22% for 2015, and total equalized value rose 1.34% versus 2.06% last year but that equates to an inflationary decrease in overall property values.  The state retirement rate for employees increased by .2% of wages resulting in a county cost of a little more than $65,000 for 2017. There is one less payroll day in 2017 which offset the cost of step increases.

Harbor Haven Health & Rehabilitation

While the majority of the project to remodel the second floor of Harbor Haven Health and Rehabilitation should be complete by the end of 2016, there will be some additional finish work that will need to be completed and funded in 2017.  We are therefore budgeting $400,000 to complete that project in the 2017 budget.  That is the last phase of remodeling at that facility.

With the reduction of 32 beds, staff needs have decreased.  The Administrator has been working with management staff to downsize staff numbers.  To reach that new number, some layoffs may be required.

Voice over Internet Protocol (VoIP) Telephone System

For 2016, we budgeted dollars for wiring our buildings to prepare for the Voice over Internet Protocol (VoIP) telephone system.  That work is on-going and will be complete before the end of this year.  Once the wiring is in place, we will then need to purchase not only the telephones, but the entire technology to support that system.  I am proposing in this budget $550,000 including $250,000 carryover from 2016 and $300,000 in sales tax revenue to complete the telephone system that will replace the existing analog system that was purchased in 1999.  While that analog system still supports our operation, it is at the end of its normal life expectancy and it is my view that we need to move forward with this project before the old system begins to fail.

Technology upgrades

We continue to modernize our technology which as we all are witnessing, has a short life span.  In addition to upgrades in our telephone system, we are also addressing needs in our other communication infrastructure, as well as software technology.  This proposed budget includes $300,000 in the 2017 Capital Improvement Plan (CIP) for the construction of another communication tower near the city of Ripon.  Once that tower is constructed, we will need to budget for an additional $300,000 to add all the necessary equipment on the tower to have the tower service our needs.  That will improve emergency communication for the Sheriff’s Office in the northwest portion of the county. Radio communication in that area did not improve adequately following the construction of the other six towers in the county.  We will be meeting with the city of Ripon to determine whether or not we will be able to use their water tower to mount our equipment.  If we can reach an agreement with the city of Ripon, we could then use the $300,000 proposed in 2017 to put the communication infrastructure on the water tower next year, therefore we would not need to budget the additional $300,000 in a future year.

I am also proposing $470,000 to complete a fiber ring connecting county buildings to improve speed and provide redundancy for our computer network.

The sound system in the court rooms has become obsolete and is no longer serving the needs of the modern court system.  In addition, there is a need for new video capabilities within the court rooms and it appears Fond du Lac County is behind the majority of counties in upgrading their audio and video system in their court rooms.  I am proposing that we being to upgrade our audio and video technology in each of the five court rooms.  At this point I do not have a firm estimate, but I have included $100,000 in the capital improvement plan to begin at least one court room in 2017.  The Judges have identified the large court room, Court Room 1, as the most critical need at this time.  If approved in the budget, the cost estimates will be confirmed and we would begin to move forward with the project.  If the cost per court room is less than the $100,000, my intent is to have a second court room completed to the extent as the budgeted dollars are available.  We will also need to budget additional dollars in future years to continue with the remaining court rooms.

I am also proposing $150,000 to complete the CMHC software replacement that supports the Department of Social Services and the Department of Community Programs for client tracking, case management, appointment calendar and medical records.  This $150,000 will be adequate to finish that software upgrade.  Implementation of the portion of the software already installed has been ongoing and will continue until complete, sometime in 2017.

Highway Department projects

The largest highway project included in the 2017 Highway Department budget is the reconstruction of County VV (Pioneer Road) from Hickory Street to Rogersville Road which includes a roundabout at the intersection of Military Road and County VV.  This is a joint project with the city of Fond du Lac and the city and county are cost sharing the $4,000,000 project at $2,000,000 each.  I am proposing that those funds be borrowed, as well as for the reconstruction of Highway G from Youthcamp Road to State Highway 67 at a cost of $1,102,000, and the reconstruction of County S in the New Fane area for $998,000.  Also included is $2,900,000 of sales tax revenue to fund other highway improvements next year.

New Highway Garage

After discussion with the Highway, Airport and Facilities Committee, I have also included an additional $100,000 to begin a preliminary site plan for a new Highway Department garage including the annexation of that site by the city of Fond du Lac plus receiving approvals from the Department of Natural Resources to move forward with the site.  To receive the DNR approvals, we will likely need to do another wetland delineation study that is more current and more detailed for that site.  The proposed CIP calls for design to begin in 2018 and be completed in 2019 with final construction to be completed in 2020.

New Positions

I am not recommending any new positions in this proposed budget although there is a need for several new positions including more social worker positions in the Department of Social Services.  With all of the other demands of this budget, I could not support that request in spite of the fact that caseloads have increased significantly.  The primary reason for the increase is the opioid/heroin issue which includes other drugs.  Parents who would not otherwise neglect or abuse their children are doing so under the influence of these drugs.  That is creating a demand for services to protect the children and hopefully help the parents with their drug issues.  It is clear that this problem will not go away in the near future and at some point we need to address the staff shortage that the drug problem is creating in Fond du Lac County. 

Despite few revenue options to support such a need, I am proposing two position reclassifications in this budget that will more accurately reflect a change in responsibilities of some individuals holding those positions. 

Wage increase

I am including in the salary contingency fund, dollars for a .75% increase for all county employees for 2017.  I had hoped to do more, but that is all the funds that are available.  I am 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 6.8% 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%, 2015 2% and for 2016 .5%.  For many of our employees their take home pay is still below what it was in 2010.

Lake DeNevue drainage plan

In the 2016 budget, we included $25,000 to fund a cooperative effort with the state to hire an engineering firm to develop a new storm water drainage plan for the Highway 45 area that feeds into Lake DeNevue and causes flooding there.  Over the years, there have been alterations to the drainage system east of Highway 45.  What this engineer will be charged with is to identify possible alternatives for 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.  I have included an additional $20,000 in the proposed 2017 budget to continue with that project.  So far we have had no agreement from the state that they will financially participate in that study but we need to move forward to find answers for the residents in the Lake DeNevue area.

Sales Tax Revenue and Allocations

The budgeted 2017 sales tax revenue is $7,797,650.  We have seen sales tax revenue increases averaging over 3% per year and we anticipate that trend will continue as the economy continues to grow.  Sales tax dollars have been allocated for 2017 as follows:

            $2,586,620 debt service on the Mercury Marine and Alliance Laundry Systems loans.

            $2,900,000 for Highway projects.

$931,200 for economic development including $500,000 more for the Fond du Lac County Economic Development Corporation Revolving Loan Fund.

            $1,609,330 for other capital projects within the county including $229,500 of previously unapplied sales tax receipts.

Additionally, $297,724 of unapplied sales tax revenue through 2016 is projected to be carried over to 2017.

Summary

The 2017 proposed levy is $42,719,849 as compared to $42,201,989 or an increase of $517,860 including debt service payments.  Equalized value, reduced by TID (Tax Incremental District) increased 1.34% to $7,002,666,900.  The tax rate of $6.10 compares to $6.11 for 2016.  Also, to meet this budget I am proposing that we apply $2,000,000 from the unassigned general fund reserve that resulted from surpluses in the 2015 budget.  That compares to $1,900,000 for the 2016 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 Basler, Fiscal Services Director, Mary Jo Myers, Highway Accounting Manager and their staffs, and all the department heads and elected officials for their assistance in compiling the 2017 budget. 

Respectfully submitted,

Allen J. Buechel

County Executive