If not for an ill-timed phone call that pulled an alder away from a key vote last November, the police department would not have gotten an extra patrol officer this year.
That and a 2.25 percent across-the-board wage increase were the major new expenditures in the 2018 budget, with the officer’s salary being paid from an unexpected increase in state transportation aids, rather than growth in the city’s tax base.
The 2019 budget is likely to be similarly squeezed, with plenty of requests and not many options to fill them.
One priority that has gotten support from first-year Mayor Tim Swadley is a nearly $300,000 employee compensation plan that would “rightsize” existing salaries for city employees and then raise them by 3 percent. But even the mayor has expressed doubt the budget can accommodate the entire plan without drastic cuts elsewhere.
“At this point, we don’t know whether there’s going to be any – or enough – money to address the (compensation plan) requests,” Swadley said. “Realistically, I don’t see us making a lot of progress on that in 2019.”
As alders will begin debating where to put the city’s money next Thursday, Oct. 4, they’ll be asked about several other department requests, such as adding four full-time firefighters to bring about 24/7 service, an additional police officer and clerical position in the police department and part-time positions in the planning and HR departments. The city also has been operating without an economic development director.
“Once again, we certainly don’t have the resources to fund those positions,” Swadley told the Hub last week. “We wanted to let the council and community know we have additional needs.”
With growth continuing at about the same modest pace it has the past few years – 1.6 percent net new construction – the city has limited options for funding new initiatives.
One way to overcome such limitations is by moving money between accounts or pushing back projects. Another way is taking on more debt for capital expenses, like vehicles, equipment and road work.
But both tactics have drawbacks and, if done frequently enough, can have long-term effects on the city’s bond rating, which affects its ability to take on inexpensive debt.
Over the next few weeks, finance director Jamin Friedl and Swadley plan to meet with department heads to hash out each department’s needs and where they stand in the budget process. And they are still waiting to hear from the state for final numbers on such revenue items as transportation aid, expenditure restraint shared funds and net new construction to determine exactly how much money the city will have to work with over last year’s budget.
On Tuesday, Sept. 25, public works director Brett Hebert delivered a presentation on the biggest road projects to the Common Council, to show alders and the public what other projects are competing against.
Staffing requests tend to be the bulk of requests that will be funded immediately by the tax levy.
The council must find room for salaries year-over-year without borrowing for them, making additions tricky when the levy increases only incrementally. That was the source of the debate over adding another police officer last year – that it was funded in part from a source that couldn’t be counted on in the future.
This year, several departments have requested additional staffing, though in some cases, as fire chief Scott Wegner put it, it’s “just so they understand what they’re turning down.”
The fire department has been requesting additional staffing for “years and years,” Wegner said, and this year he’s submitting requests for a few different configurations, involving multiple full-time staff additions, to bring the department up to 24/7 coverage.
Police chief Greg Leck said he has requested additional staffing “every year,” and this year he’s asked for one additional officer and a part-time clerk, at an estimated $85,000 and $25,000, respectively.
The city has been without an economic development director since last April when Tammy LaBorde stepped down from a role that was combined with the finance director, but it’s not a position the mayor thinks can be filled in the current budget climate. Instead, he’s been working with the personnel committee to draft a job description he will try to fulfill by delegation until money can be freed up to find someone permanent.
The mayor also said he’d like to fund a community survey that would cost about $15,000 to provide feedback about community services, something he said he’d fight for while campaigning. And he said he’d like to resurrect a street preventive maintenance program and increase funding for sidewalk maintenance, though that would be done with recurring borrowing.
But Swadley’s stated priority is the compensation package, which would bring the city’s employees in line with median wages in their industry and, in conjunction with last year’s 2.25 percent boost, eliminate a 5 percent salary gap that was determined by an outside consultant in 2015.
Human resources director Amy Jo Gillingham encouraged alders to consider it earlier this month in committee meeting.
“If we hire additional staff instead of rightsizing, what’s the message we’re sending?” she asked.
Given the relatively small amount the city can raise taxes – approximately enough for one full-time employee plus benefits and a 1 percent cost-of-living adjustment – new priorities would have to be funded by cutting elsewhere.
Since 2011, municipalities have been prevented by state statute from raising taxes more than the net value of new construction plus certain debt-service related costs. That number is expected to be about $113,000 this year which is in line with previous years. In 2017, the city raised its levy by $123,000 and in 2016 that number was $133,000.
The policy has left cities “hamstrung,” as Friedl put it, and Stoughton has struggled with this more than many Dane County communities. At 1.59 percent above last year’s numbers, the city is still below the county’s average of 2.6 percent.
That has encouraged cities to borrow, as the increased debt service can be added to the levy, he explained.
However, Stoughton is nearing its debt limit.
The state limits municipalities from taking on debt more than 5 percent of their equalized value, and Stoughton’s policy caps it at 4 percent. The city’s debt is projected to be 3.32 percent of this value in 2019, 3.70 in 2020 and 3.73 in 2021.
In 2018, the city borrowed $8.4 million to pay for a new public works building on the city’s southeast side, and it’s planning millions more in the next few years.
As a result, most of any increase residents will see on their tax bills will go toward paying off debt, the mayor said.
Changing the process
The department heads will present their proposals at three budget meetings in October, followed by a budget summary meeting Nov. 1. The hope is to get the budget approved by Nov. 13.
With a new mayor, a new finance director and several new alders, the process is likely to be slightly different from years past. Instead of rolling over budgets year-to-year with a 2-3 percent cost-of-living adjustment, Friedl has been working with departments to report their “actuals” in what he calls a more common-sense approach.
“If your budget is off in the beginning … and you kept rolling those numbers over with a bit of inflation, you’re just continuing to budget the incorrect amount,” he explained.
The mayor has also asked department heads to submit additional staffing requests to HR, even if the city won’t realistically be able to fund the positions.
“We’re not going to be able to include all that in the budget,” Swadley said. “What we want to do is get that out there and if there is an opportunity we can address it.”
The first budget meeting will be Thursday, Oct. 4, with presentations about the Capital Improvement Plan, utilities, information technology, human resources and recreation. The second meeting, Thursday, Oct. 18, will focus on police, fire, EMS, the Opera House and library. The third will be Thursday, Oct. 25, with presentations from planning, streets, stormwater, the senior center, clerk and finance. On Thursday, Nov. 1, there will be an overall budget summary.
A part of the purpose of these discussions is for the taxpayers can see how the process works, Swadley said.
“We want people to know where their money is going,” he said.