New Berlin – Taxpayers should see no property tax rate increase for city purposes with the proposed 2017 budget, partly because of low gas prices. The proposed spending plan will go to a public hearing at 6 p.m. Tuesday, Nov. 1.
The property tax rate would stay at $5.24 per $1,000 of assessed value, meaning that the owner of a home assessed at $250,000 would pay $1,310 for city purposes.
Aldermen were pleased with the budget proposal.
“It came out to a zero increase, that’s what the citizens asked us for and at the same time does improve some departments,” said Alderman John Hopkins.
More for park/rec
Parks and Recreation is one of those. An employee position went from part-time to full-time in both the parks and the recreation areas.
A boon to the city budget this year is the low prices at the gas pump. They have translated to an anticipated $35,000 savings for the city next year, said Finance Director Ralph Chipman..
The New Berlin Common Council is slated to vote on the proposed budget Nov. 15. The proposed 2017 budget is $35.6 million compared with $34.5 million the city expects to spend by the end of this year. The difference of more than $1 million is an increase of 3 percent.
Tax base grew
Growth in the tax base is the main reason why taxpayers won't see an increase.
The property tax levy is up a proposed 1.13 percent, the same amount the tax base grew, Chipman said.
The proposed levy of nearly $25.3 million is up $282,668 from the previous year.
The proposed spending plan contains no initiatives, other than major road work. The Board of Public Works is still finalizing those plans. Because the first payments for the roads that will be improved next year won’t be until 2018, the CIP will not affect the 2017 city budget, Chipman said.
The 36.7 square mile city contains 227 miles of streets and 170 miles of water mains.
No new spending
Hampering new spending initiatives is a huge increase in health care premiums coupled with an increase in payments to the Wisconsin Retirement System, especially for police and fire fighters.
The eventual size of the health care premium increase is still not known, but the city is shopping around for a better deal, Chipman said.
The city put aside money anticipating a 15 percent increase, but Chipman said, “We thought that would even have a cushion, but now we find that will be substantially short.”
Only last week, the city got that bad news, he said.
Already, the city went to a high-deductible plan last year to keep costs down. Deductibles under the current policy are $2,000 for a single plan and $5,200 for a family plan. Employees pay 15 percent of health insurance premiums.
Next year's additional retirement expenses come from the Wisconsin Retirement System that increased how much of an employee's pay must be paid into the system, Chipman said.
Police, fire more
Since the state’s Act 10 was passed, the city and employees who are not police or firefighters have split the retirement payments evenly, he said. This year, the city and employees each pay 6.6 percent.
However, the city pays a greater share for police and fire, under Act 10 and the Wisconsin Retirement System, Chipman said. That’s mainly because police and firefighers are eligible for disability payments for duty-related injuries and because they can retire at a younger age than regular employees, he said.
So, this year the split is 6.6 percent for police and firefighters and 9.75 for the city. Next year with the payment increase, the split will be 6.8 percent for police and firefighters which is the same as all the other employees, and 11.4 percent for the city, he said.
The proposed budget also includes money for raises. Contract negotiations just started with police and fire unions.
Savings on borrowing
The city maintained its AAA bond rating in August, saving taxpayer money in interest for such purposes as roads. Moody’s Investment Services noted when it kept New Berlin's rating at AAA:: “history of sound financial management characterized by prudent management and a stable financial position.”
Only three other Wisconsin cities have AAA bond ratings, the highest given, city officials said.
Property taxes pay for 71 percent of the budget with the largest share, 42 percent, going to police and fire. Debt service is next at 20 percent. Then come general government at 16 percent, public works at 10 percent, parks and recreation at 4 percent, the New Berlin Public Library also at 4 percent, community development at 2 percent and non-department at 2 percent.
The increase for the fire department alone is more than the levy increase. The fire budget is up $329,189 or 8 percent from what the department expects to spend by the end of this year. Chipman said that’s because the department is offering a new service involving transporting patients from the Froedtert Hospital satellite location in New Berlin to other hospitals. While that service has added cost to the department's budget, it more than breaks even, he said.
Police budget up
The proposed police budget is up nearly $300,000 or 3.3 percent, mainly due to increases in retirement and health insurance premiums, Chipman said.
Police Chief Joe Reider said he is still cautious about requesting body cameras or drones, as some police departments have.
Storing data for as long as required is costly, he said. Some departments have even suspended their use of body cameras because of storage costs, Reider said.
The videos also are often grainy and it’s hard to tell what is being viewed, he said.
Opinion is divided on the usefulness of body cameras. Muskego Police Chief Craig Moser who has asked for both body cameras and a drone in the 2017 budget acknowledged there is an ongoing cost to keep the data.
“It’s worth it because our citizens expect body cameras now,” he said. “With the news over the last year, if there is use of force, what’s the first thing they ask for – body cameras.”
While the body camera video may not settle a dispute, it is a tool that can help, he said. Body camera video also is good for evidence collection because it records scenes before they can be disturbed by weather or even people involved in incidents, Moser said.