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Practically Speaking

Kyle and her husband moved to Brookfield in 1986. She became active in local politics and started blogging in 2004. Her focus is primarily on local issues but often includes state and national topics, too. Kyle looks at things from the taxpayers' perspective in a creative, yet down to earth way, addressing them from a practical point of view.

Economic slump means revenue slump, so cut spending & use resources wisely

City of Brookfield, Mayor Speaker, TAXES, THE ECONOMY

Did you see this article: City may face budget shortfall of $915,000? Revenue sources declining along with economy, director says.  It shouldn't surprise anyone that when the economy is in a downturn, people cut back on spending--either by choice or necessity.

 

As the article stated, consumer spending cuts affect city revenues collected from taxes and fees: less travel = less room taxes, fewer building & remodeling projects = fewer permit fees paid to Brookfield.

 

Struggling local restaurants, retail, and office buildings could result in other lower revenues. Commercial property owners with high vacancy rates might request lower assessments. Vacant businesses may become delinquent in paying their property taxes. The mayor and city department heads are looking for places "to cut costs." In addition to that effort, shouldn't we also be looking at how we are spending the resources we still have?

 

Late last year I raised the question about revenues from the cell phone towers all being put toward the Greenway Corridor Bike Trail system:

The money comes primarily from the cell tower lease fees the City of Brookfield charges the cell phone companies to put up towers in our city.

Brookfield gets between $200,000 - $300,000 each year in lease payments. The park department gears its new Greenway projects to stay within this dollar amount. Kolstad informed me that we also benefited from $135,000 in DNR matching grants over the past 5 years. (That would be [more] free :) money.)

 

...I am not a fan of the Greenway Corridor Recreation Trail system, primarily because of the expense for construction, maintenance, and snow removal.

In some respects, the cell tower rent money going to foot the bill for Greenway construction is very much like the stimulus projects some officials are rejecting.  Although our cell tower money may cover the initial expense of constructing the path, it does nothing to pay for maintenance and snow removal costs for the path every year thereafter.  Every additional trail segment adds to the city's yearly expenses.

 

We probably don't need to repair yet, but I'm thinking that special snow blower tractor gizmo can't be cheap. I guestimate snow removal costs somewhere around $75+/hour when you factor in initial blower tractor purchase, maintenance on unit, labor and benefits, and transportation of the unit from site to site? The concept of getting a Greenway Corridor at no cost is rather like getting a free puppy! (Think of the maintenance of path and snow removal as Vet. bills, dog food, groomer, and boarding charges for that free pet. Hardly no cost, is it?)

 

I know many people enjoy the Greenway Corridor. That is not the issue right now. A $915,000 shortfall in revenue, however, is. According to the article and Finance Director Robert Scott, this is not going to turn around soon. The shortfall for 2010 is estimated to be $950,000.

 

So, what do we do in the meantime? Do we tap into our reserves and keep spending at its current levels? Or, do we cut back where we can and use this cell tower lease fee money for something more important?

 

I had estimated the cell tower rents at $200,000 to $300,000 a year. I was corrected in the comments section by an alderman; "The cell tower revenue for 2009 is forecast to be $382,964." He also concluded that the savings to the typical home in my area if we applied the lease money to the city's coffers would be 12 cents for the year. That figure just did not seem feasible to me. I roughly calculated it at about 100 times that amount at $11 - $13. It was later confirmed by someone at City Hall that the dollar amount was higher, $16.17 per home of my value, "...divide it by our total City assessed value of $6,532,118,790. That comes out to 5.9 cents per thousand of assessment. .059 x 274 = $16.17."

 

My purpose here is not who is right and who is wrong or to talk about past squabbles (so please, comments should stay on the topic of the shortfall and cutting spending.) I am just trying to illustrate that this "free" money for a no cost bike path adds up. We are in tough times; this cell tower windfall could help plug more than 2/5ths of the forecasted shortfall.

 

The mayor, city departments and council are going to look at places where they could cut spending. Maybe they could cut back on:  landscaping? - another big ongoing maintenance cost, sidewalks on BOTH sides of the street? - same snow removal and path maintenance issues as with the Greenway. I am sure there are more areas. I would hope they would at least put the Greenway projects on hold until the economy improves.  Rather than increase the property tax levy, certainly they should look into how they spend this free money! 

 

POST SCRIPT: I do recall efforts in 2006 to reduce some of the surplus funds, one of them being the $375,000 mosquito abatement fund:

Mellone [Jerry] had wanted to cut the full $100,000 in mosquito funding, noting that the program had a surplus of about $375,000 and the city had not needed to do any mosquito treatments in four years despite taxing annually for them.

And Surpluses bedevil Brookfield, Some aldermen wonder whether they're doing too much taxing: (My emphasis)

In the last three years, city departments have spent almost $3.5 million less than what aldermen budgeted for them, city data shows.

...A $1.6 million budget surplus in 2005 prompted several aldermen this week to question a recommendation for a 4% spending increase for city departments in 2007. Aldermen Dan Sutton, Gerald Mellone and Scott Berg questioned why departments would need 4% more than their 2006 budgets when their previous annual budgets were larger than needed.

Aldermen gave city departments a 4.3% increase for 2006, and the city's finance director predicted that 2006 will end with a $500,000 surplus.

That would reverse a trend of rising general fund surpluses. After no surplus in 2002, there was a $664,000 surplus in 2003, $1.2 million in 2004 and $1.6 million in 2005.

"Right now it just looks like we're overtaxing," Ald. Sutton said at a special Finance Committee meeting on Monday.

 

Links: 

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Brookfield7, Fairly Conservative, BetterBrookfield, Vicki McKenna, Jay Weber, The Right View Wisconsin, Randy Melchert, Mark Levin, The Heritage Foundation, CNS News

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