WHEN IS A DEFICIT NOT AS BAD AS IT LOOKS

The Ripon Common Council tonight received the results of its 2008 audit. For the first time since I became mayor in 2003, we are dealing with a budget deficit. In years past, we had budget surpluses, which, based on a proposal I made back in 2004, we put 50 percent of into the equipment replacement fund, and the other 50 percent was spent on items which did not make the cut in the previous budget cycle or had come up since the budget was adopted (I.E. The Welcome to Ripon signs, extra gas funding, dugouts for the softball diamonds in Murray Park, etc.).

This year, the city's revenues came in around $100,000 below budget, and our expenses were $330,000 above the budgeted amounts, according to the auditor. But, what at first glance, appears to be a $430,000 deficit, is actually closer to $200,000, and it will be fixed without raising taxes.

First of all, the Public Works budget was up $100,000 in expenses, which was expected due to the worst winter in recent memory (2007-2008) and the flooding from last June, which resulted in massive amounts of overtime and repairs. Second, our investment income was considerably less than we expected. The city puts money away to earn interest (such as our reserve fund). When you are talking the difference between a 3 and 4 percent return on a $1000 CD, it is not a large amount. When you are talking about more than $1 million in savings, it does make a difference.

The real curveball in the way this deficit is figured comes to the equipment replacement fund. As I mentioned, we have been putting away parts of the past budget surpluses into the fund, which reached more than $340,000 last year. So, we applied the money to the purchase of a new fire truck and a new emergency government vehicle, totalling about $225,000. Unfortunately, it appears we spent the money without budgeting for it, either through increased taxes or a borrowing. In other words, pulling money from the piggy bank, rather than putting a charge on the credit card, resulted in our deficit looking larger than it is.

In the end, and we need to see some final numbers, the "actual" cash deficit comes in around $150-200,000. And how will we fix it? The easy answer is to raise taxes come this fall, but I won't go there. We have built up our reserve fund to more than $1.4 million, and it has been built up for times like this. Sadly, the state of Wisconsin should have been doing the same thing when it was running large surpluses under the Thompson Administration, but it did not, and we are paying the price today.

In other action tonight:

* Approved a street closure request for the west half of 100 block of Watson Street (June 10th). Boca Grande wants permission to close the west half of the 100 block of Watson Street from 4:00-10:00 p.m. on Wednesday, June 10th for a customer appreciation day. There would be live music and events outside, but alcoholic beverages won’t be served or consumed.

* The Council tabled a proposal to adopt a policy setting requirements for the collection of brush at curbside. City staff is collecting a rising volume of brush at curbside, and staff feels a formal policy is needed. They recommended limiting free curbside pickup to 4’x 4’ x 8’ piles, with a fee for more brush, based on the amount, and that stumps, root balls, and twig/small stick won’t be taken at the curb.


* The Council approved a request to amend official City map to show a master plan street extending Windsor Road to Meade Street. The Council did table a proposal to approve names for streets by for the East Town Development, where Agnesian Health Care is building a new clinic. The developer wanted the street off Highway 23 to be called “Treasure Boulevard”, and the one coming in from Douglas Street to be named “Gold Street”.

* The Council agreed to scale back the size of the new downtown TIF to allow for it be officially certified by the state. This comes in response to an email earlier this week from the City Administrator explaining why the TIF could not be created:

"On May 14th, the Wisconsin Department of Revenue notified the City of Ripon in writing that the State was not able to certify creation of TIF District #8 (downtown), as the State concluded that total tax increments from our active TIF districts, plus the equalized value of property in the new district, exceeded the maximum of 12% of total equalized value of all property in the City allowed by Wisconsin Statutes. The City is currently pursuing the following two options. First, we are working with our State representatives to introduce special legislation to allow the district to be certified. Such legislation was approved by the State once before, and a bill is now going through the legislative process on behalf of a community in a similar situation. Also, we are immediately starting the process to create the district again, reducing total value of property in the new district, or making changes to existing districts, to ensure that the district will be certified. The expected timeframe to create the new district is approximately 60 days, and the City is committed to expediting the process to the greatest degree possible. While, at first glance, this would appear to be a negative for the city in terms of economic development, the bottom line is that a majority of our current TIF districts have been growing at a positive pace we did not anticipate. We have traditionally used conservative revenue and growth projections, but, in several cases, the actual growth in some districts have been far in excess of what any reasonable pre-creation assumptions would suggest."

Any questions, email me, or comment away..............