Posted: Sept. 8, 2009 |(0) Comments

From Germantown to Milwaukee, cities and villages experiencing budget woes due to the troubled economy have been forced to give employees unpaid days off. Precipitous drops in permit fees, interest earnings, state aid, and the costs of a tough winter cut the revenue coming into the communities, but reductions in anticipated fuel costs and careful scrutiny of expenditures on the expense side have helped balance shortfalls.

Although an early snowy winter could cause problems in some of the communities, North Shore managers and administrators expect to get through 2009 without municipal furloughs or layoffs.

The majority say they will end the year with revenue balanced with expenses. All have sufficient fund balances to weather a dip into red ink.

Bayside

Village Manager Andy Pederson said an anticipated shortfall of $50,000 in revenue can be made up on the expense side of the budget.

"Our interest income has been reduced by 33 percent," Pederson said. The village budgeted $100,000 in interest for 2009, a drop from the $160,000 in the 2008 budget and one that Pederson believed was conservative. By the end of July, the village had earned only $51,000 in interest.

Revenue from permits and recycling is also down, he said.

On the plus side, the village planned on fuel in the $4 a gallon range. That didn't happen.

The village put in cost controls early in the year and has looked at everything from the different deductibles on its vehicles to changing to energy efficient light bulbs to reduce costs.

Bayside had $731,000 fund balance at the beginning of the year.

"We maintain a 20 percent fund balance, and everything above that goes into a tax stabilization fund or road account," he said.

The 20 percent fund balance refers to a policy whereby the village maintains a fund balance that is 20 percent of the general fund.

Brown Deer

Saving for a rainy day will pay off for the village. Although Village Manager Russell Van Gompel projects a $245,000 deficit at the end of the year, a healthy fund balance of $2,304,778, or 25 percent of the general fund, provides a cushion for the red ink.

Although Van Gompel anticipates using some fund balance at the end of the year, he said village staff is working in every way possible to reduce costs. The village will not fill two vacant positions, one patrol officer and an inspector in the Community Services Department.

Van Gompel said the 2009 budget called for $625,000 in hotel room tax revenue and $250,000 in interest income. Instead, he projects $450,000 in hotel room tax revenue and $85,000 on interest income.

"We are watching expenditures but not taking any drastic action (like furloughs)," he said. "The fund balance is healthy enough."

The village fund balance policy calls for it to be between 15 and 25 percent of the general fund.

"When all is said and done, we will be at 22 percent," he said.

Fox Point

Village Manager Susan Robertson isn't quite ready to make a year-end budget projection.

"I do estimates in conjunction with (2010) budget preparation," she said. "Historically we have always been under budget. Revenue is usually where we project it but it's difficult to say this year. We don't have the staff to do year-end projections every month."

Fox Point has a fund balance policy.

"It's a little complicated," Robertson said. "As of January 1, the balance should be no less than 15 percent of the general fund (of the newly adopted budget)."

The village fund balance, which was at $540,586 at the start of the year, is at 8.5 percent.

"This is going to be a challenging budget because we have to address that fund balance," she said.

The board can figure out how to raise it while staying within levy limits or they may alter the policy, she said. Robertson said she would never recommend a balance below 10 percent.

Knowing that the interest income is running less than projections, Robertson said staff has been more conservative than usual about purchases.

Glendale

Conservative estimates for the 2009 budget have worked out for the city.

City Administrator Richard Maslowski said the budget will be adequate for the year without any furloughs or any need to dip into fund balance.

The city's fund balance at the beginning of the year was $2,860,424, or 23 percent of its operating budget.

"We have a policy that says we must have a minimum of 20 percent and it is not to exceed 25 percent," Maslowski said.

Having that rainy day fund is important.

"If we run into a difficult winter or unexpected fuel prices, or in Glendale in the spring with the river and the potential of flooding, it's good to have that cushion," he said.

Mequon

There are many people who don't want to see a snowy winter. Put City Administrator Lee Szymborski at the top of that list.

"We will end the year in the black by a thin margin," he said. "It will be dependent on weather conditions and no other surprises. I am hoping for a decent winter."

The 2008 budget hit red ink because of what Szymborski called "bookends of bad weather." He doesn't want a repeat. It's expensive to send out snow plows to clear the streets in the 46.8 square-mile city.

Interest earnings and permit fees are down, he said, but if the stars align correctly, the city will be in the black.

The city started the year with a low fund balance of $688,748, or 5 percent of its operating budget. Favorable road construction bids allowed the city to made a mid-year correction to the budget, bringing its fund balance to 9.5 percent.

River Hills

The end-of-the-year budget projection is red ink, but not by much, a $659 deficit. Village Manager Tom Tollaksen said that will not be a problem, that it can easily be made up between now and Dec. 31 by careful money management.

"We are getting killed on interest income," he said, citing the reason for the deficit.

River Hills has a $885,519 fund balance, or 24.05 percent of the operating budget.

Thiensville

"We have 'home budgeting' in Thiensville," said Village Manager Dianne Robertson. "We don't buy it unless we can afford it. We budget for expenditures over time and when we have the money, we buy it."

In this cash-on-the-barrel community, there is no village debt. Every year the Village Board puts money into its fund balance for specific purchases.

"We save some every year toward large purchases," Robertson said. For instance, there is $79,000 saved for a vehicle for the Department of Public Works whose trucks and snow plows typically cost between $100,000 and $170,000. "We saved to repair Freistadt Road, Pigeon Creek and to install the fish ladder."

Those last three projects are being done this year, the main reason Robertson said the fund balance will drop from its starting point of $1,631,709. That balance is 67 percent of the total operating budget of $2,424,852.

The village has a policy requiring a 20 percent fund balance and a tax stabilization fund.

Robertson thinks the 2009 budget will balance at the end of the year, but the board has taken some steps to ensure that.

"We made some cuts to offset some loss of interest income," she said. The village budget included interest income of $139,000. At the end of July, the interest totaled $19,500.

Shorewood

It may be one of the smallest communities on the North Shore but the village has the mother of all fund balances, $5.415 million, or 55.6 percent of the general fund budget.

"Over the years, the boards have been very careful, using fund balance for larger, one-time items," Village Manager Chris Swartz said. "That is why we used some of that fund balance for the home-improvement loan program. The idea was to invest it in the village."

The village this summer established a $346,500 loan program. The year-long pilot program includes down payment, exterior maintenance, duplex conversion and attic improvement loans. Loans will vary from a maximum of $4,000 for a down payment to $20,000 for duplex conversions or attic improvements.

Regarding the 2009 budget, it's projected to be in the black.

"We did some adjustments and monitor it on a regular basis," Swartz said "There have been some good positives for us. We budgeted $4.50 a gallon for fuel and that came in less. We have deferred some budget items. You could say we are exercising more frugality than usual."

Whitefish Bay

"We'll be in the black," Village Manager Jim Grassman said. "We strive to develop an accurate budget and the numbers for the most part are coming in where we projected them."

Interest income is down, he said, but it's up in other areas, such as fuel.

The village also deferred some spending it intended to do in 2009, a capital expense contribution for the North Shore Fire Department that will be paid in 2010 rather than 2009 and the deferral of some road improvements because of the Milwaukee Metropolitan Sewerage District's interest in consolidating its sewers in the village.

Whitefish Bay, too, has a comfortable fund balance of $3.5 million.

"We strive to have it be 20 percent of expenditures," Grassman said.

It's currently at 27 percent.