Another year of preparing the village for its future as a mid-sized suburb is likely to mean increased taxes – and a few tough decisions.
Though growth in Oregon continues to be average by Dane County standards, staffing and facility needs are still catching up. The library is in the midst of a five-year plan to increase staffing prior to its new facility opening in 2022, the senior center will be next in line for a new building and has asked for more staff, too, and the fire and police departments are looking to grow their administrations, as well.
City staff presented a rough sketch of the budget to the Village Board on Monday, Sept. 16, warning trustees taxes will once again need to be higher than usual, with staffing needs exceeding the additional revenue that is coming from growth.
This year’s net new construction – the number used by the state to determine levy limits – is almost exactly Oregon’s average over the past seven years, at 2.45 percent. That translates to about $124,000 in new revenue, which won’t be even close to enough to pay for the four new full-time staff requested by department heads.
But village administrator Mike Gracz told the Observer on Friday, Sept. 13, that the positions requested are all important, and they all set up the village to become the modern community it needs to be. Gracz and finance director Lisa Novinska are working on ways to squeeze them into this budget cycle, he said.
One option is reducing capital expenses by putting off projects or taking on more debt. Another is shifting some leftover debt service related spending capacity or using extra impact fees, both of which provide a buffer for a bad year.
The village can also hire some of the positions in the middle of next year rather than the beginning of the year, which defers some of the cost but works out if the 2021 budget doesn’t have as many staffing requests.
Some combination of all of those is likely, and Gracz said tax increases higher than the targeted $50 a year are almost inevitable, just as they were last year.
“Overall, I think the department heads have done a good job of submitting realistic budgets,” Gracz said. “That’s been our whole thing the past four or five years. We don’t want to increase taxes but we know they’re going to go up, and we don’t want to shock people.”
The Village Board plans to discuss the preliminary budget Monday, Oct. 7 – with some numbers still yet to be filled in – and continue the discussions Oct. 14 and 16 to prepare the budget for a public hearing in November.
Four departments have asked for new staff, and two of those are leadership positions.
One of those is in the Oregon Area Fire/EMS department, which is not entirely under the village’s control.
At the July meeting of the village and its surrounding towns – who share responsibility for the services – fire/EMS chief Glenn Linzmeier explained why he felt the department should add a division chief. The position, which is mid-management but below a deputy chief, would handle specific aspects of the operation, and it got the approval of the commission that controls the department, though each municipality gets to vote on it separately.
While the decision whether to staff that position won’t be made until Sept. 25, Gracz said he’s expecting they will, based on the reaction it got in July.
The Oregon Police Department also wants to add another layer of administration by creating a deputy chief position. The plan would be to phase it in over several months with internal promotions and backfilling.
That request is expected to be discussed at the Sept. 23 Personnel, Public Works and Protection committee meeting.
While the library staff addition could be postponed, it’s the third staff increase for the department from a four-year plan, which was stretched to five after no positions were added this year. That is intended to get the library staffing prepared for the opening of the new building in 2022.
Assuming everything goes according to plan, the following year, the village would be paying debt service on the new facility, yet another increased cost.
The other request is for an administrative assistant to help the senior center, which has been relying on volunteers for front desk, reception and other administrative tasks.
The library and senior center are the first two parts of a multiyear plan to revamp what’s being called the village campus, even though the facilities will be blocks apart.
So after the library moves to a new facility on North Main Street, the village will consider tearing down the existing building and making use of that space for a new senior center a year or two later.
One of the items Gracz is putting in this year’s budget is a study to consider facility needs so the planning for the senior center is well underway by the time the library building is vacated.
Though a bigger senior center won’t necessarily mean the same large staffing increases that are concurrent with the library expansion, it will still come with extra costs. After taking out $6 million in debt for the library, there would be more debt service increases for the senior center and eventually other village buildings to follow.
For the next couple of years, however, capital expenditures could be a bit lower than they have been. Plans for this year total around $2.5 million, including half of the $1.5 million estimated to rebuild the Janesville and Park streets intersection and around a half-million dollars to fix the 3 year old Rotary Bike Trail, which is unusable after record rains last year contributed to Lake Barney swelling from 30 acres to 800 and submerged part of the trail.
Other potential costs for next year include building a park at the westside Highlands of Netherwood subdivision, which is behind schedule but still expected to get started next year.
As always, the budget remains a moving target.
Many of the numbers that will be essential for determining both revenue and expenses remain unknown, and others will be determined later.
For example, state transportation funds aren’t usually determined until October or November. Health insurance costs are still being worked out, and the final number there won’t be set until employees go through open enrollment, which often means people adding or dropping the health plan.
Another fund, the expenditure restraint program, isn’t a factor this year, after spending last year put the village over that limit. The added costs for staffing this year might cause the village to miss out next year, as well, though the roughly $30,000 annual bonus isn’t nearly as high as it is in some other communities around the same size.
Wage adjustments – which were 2.5 percent last year – could be considered in light of police and firefighter contracts, which are still worked out with unions.
With those numbers and others in mind, Novinska and Gracz will take some educated guesses and plan out how much the village should apply from its various impact fee funds to offset debt service and try to keep taxes reasonable. But using a disproportionate amount next year could affect future years.
“We’re budgeting for 2020, but we’re also budgeting for 2021,” Gracz said.