It might have taken a surprise hit of employee turnover and increases to fees and wheel taxes to fund city roadwork, but the city of Janesville could make relative history if it passes its proposed 2022 budget.
For one, city officials say, a stormwater fee increase and wheel tax hike will help the city meet its goal of trimming about $2 million worth of borrowing it has used to fund its annual street repair program that covers 12 miles of repairs every year.
Second, the city is projected to see more than $600,000 in savings over the next year in higher-than-anticipated employee turnover—more than three times the savings expected through earlier projections.
In an initial budget proposal to the Janesville City Council on Monday, City Manager Mark Freitag said at an earlier point, the city couldn’t have planned a balanced budget the way city officials now conceive it.
But he said the city has bridged a projected $600,000 budget gap, in part through a citywide focus on keeping spending and programs capped for another year at 2021 levels. He said a larger-than-expected turnover in staff helped, too.
Local taxpayers might not notice the comparative windfall the city is seeing when they pay out what on average will be a $120 increase in taxes and fees—the bulk of which is coming through a doubling of the wheel tax to $40 per residential vehicle and a shift of all curb and gutter replacement costs to the stormwater fund.
But Freitag and city Finance Director David Godek said the city’s preliminary proposed budget would be the first in years that wouldn’t dip into hundreds of thousands of dollars from its rainy-day account.
Going back to at least 2000, city officials said, the city will not have to dig into reserve funds to prop up its $35.5 million general fund, a segment of the city’s $115 million budget that pays for many of the city’s day-to-day operations.
Last year, the city tapped about $450,000 from reserves to restore the operating fund, but Freitag said that pales in comparison to the $600,000-plus in reserve funds the city drew on in 2014, the first budget year of Freitag’s nearly nine-year tenure.
Freitag called the city’s new drawdown in borrowing and the shift away from use of reserves to plug a budget gap “a Janesville win”—although one council member questioned whether taxpayers will be winners in the short term.
After hearing an hourlong budget presentation, council member Michael Jackson told Freitag and Godek that while he supports the city administration’s preliminary budget, not all residents have given him positive feedback on the wheel tax and stormwater fee restructuring the city would pursue.
“There are people who are upset over the wheel tax and other taxes,” Jackson said. “Are we balancing the budget on the backs of our citizens? They’d get more in taxes, and we’d get the benefit of a balanced budget.”
Freitag and Godek continued to defend a wheel tax hike that will funnel about $100,000 to the city’s general fund and provide about $1 million for street repairs. Going forward, the city says, the budget would cut back on borrowing annually while using stormwater fee increases to fund the city’s current annual workload of street work under a “pay-as-you-go” framework.
Godek compared the effect of the city’s current model—borrowing millions a year for street maintenance—to “putting groceries on a credit card” as the city sees the revenue it can legally raise through a tax levy increase outstripped by inflation more and more every year.
Freitag said “I don’t think it’s a fair analysis to say we’re shifting the wheel tax to other people” to balance the city’s budget.
He called earlier borrowing and use of the city’s fund balance to shore up the city’s budget “just a bad habit to borrow over time.”
Freitag said the city budget proposal comes amid freezes in many areas of new spending, including the end of a subsidy that for years funneled hundreds of thousands of dollars in Janesville Fire Department services to a handful of towns in northern Rock County.
That change in how the city bills for fire protection will allow the city to buy a new $225,000 ambulance that would allow the city to run one ambulance at each of its five fire precincts.
The council will give feedback on proposed changes to the budget by Monday, Oct. 18. The council won’t move on a final budget until mid-November.
Only one resident, Tom Lipinski, commented on the city’s budget Monday night. Lipinski told the council he would like to see the city hold the line on its offer to pay for up to half of a new indoor sports complex at Uptown Janesville.
Under law, the city is allowed to use some of a $4 million federal COVID-19 rescue funding package to pay for a new sports complex.
The council could vote later this month to send that project to a design phase. Meanwhile, a private fundraising group has raised about $6 million, about 20% of the estimated $30 million project.