 Welcome to Sheboygan County Government, working for you, my name's Adam Payne, Sheboygan County Administrator and co-host of this program with Chairman Mike Van der Steen. And today we're very pleased to have our Finance Director with us, Mr. Tim Finch, welcome Tim. Thanks Adam, appreciate it, glad to be here. It's good to have you here as some of you may be aware, it's that time of year again when the county and many units of government across the state are working on their budget development. We're working on our 2009 budget and it's a very important responsibility of Tim and his team in the finance department. And we're gonna talk about that a little bit today, but before we get going, Tim please begin by telling our viewers a little bit about when you started with the county and in the finance department. Sure, yeah, I started with the county in 1999 and I've been in the finance department since May of 2000. So had a little bit of time here before I moved to the finance department, but and I've been in Sheboygan that same period of time, I'm not a Sheboyganite. But I enjoy it here, it's very nice, great place to live, so I really enjoy it. And big picture, what are the key roles and responsibilities of the finance department? Yeah, a lot of things and it keeps our jobs kind of exciting. It's never a boring moment in the finance department. Budgeting as you mentioned is probably the most labor intensive thing we do because it's pretty much in all your process. We do external and internal financial reporting, counts payable, counts receivable, internal auditing, debt management, financial forecasting, financial policies and procedures for the county as a whole and financial analysis, so lots of fun stuff. A lot going on, how many staff do you supervise in the office? We have 10 people in our department and kind of fluctuates depending on whether positions are filled or unfilled and periodically we'll have a position that remains vacant, but 10 people. Well as I mentioned, the budget process as certainly we've been talking about since last February, March already, but really getting in the heat of is one of the most important documents that's developed, in fact it's the most important policy document that the county board ultimately adopts. How does the process work? What's a thumbnail sketch of the budget development process timeline? Sure, yeah, it's an interesting one. As you know, it really starts in January, February. We'll get together and start talking about what are the challenges for the year, bringing in the county board chairman. Kind of get a feeling for what hurdles are we gonna have to overcome in the budget process and then look at what's an appropriate target for that coming budget. So that starts in January, February, March and that period of time. And then that really kind of builds up to the budget kickoff, which is in June. And at the budget kickoff, that's where the chairman, yourself, the finance committee will relay the targets for each department to all the departments in the county and give them a chance to ask it in questions and really set the stage for what's gonna happen with that budget. Where does the county wanna go? What do they want the tax rate to be? How much are we gonna levy the taxpayers? Or will the levy go up or down? So that's the budget kickoff in June where the targets are given to all the departments. Then after that, there's a period in July and August when departments will have to come to you. You're kind of the first line of defense against to guarantee that we're gonna meet our overall budget goal. So they have to come to meet with you and myself. And the job is to position them to go to their committee with a balanced budget based on their targets that they were given. Then after that, they go to their own committee. Again, their budgets are reviewed. Their committee can remove anything they don't feel is appropriate, add things. Their job also really is to position that budget to meet the overall goal for the county. After that, then budgets will go to the finance committee. And often the finance committee has to do heavy lifting as far as making tough decisions on what we can afford to do, what we can't afford to do. So that's a very important step. That usually happens August to September, October 14th. We actually publish the budget. It's available. We publish a summary of it in newspaper. Make it available online. October 21st is presented at the county board. And October 28th, after they've had one week to kind of digest it, then there's a public hearing and a line by line review of every single budget. And November 4th, it's adapted by the county board. So it's a long, long involved process as I know you and Mike are well aware. You went through that pretty quickly and for our viewers benefit. The budget process, as you said, it's almost an annual development process. We start already in January, February, working on the next year's budget and really starts heating up this summer and fall. As you pointed out, we're in the midst now of reviewing individual department budgets and the liaison committees will then get involved in the finance committee and ultimately adopted by the full county board. Both Tim and I have been with the county now for almost 10 years. I started in 1999. I mentioned off the air just a few minutes ago how important it is to surround yourself with outstanding people. And Tim is certainly one of them, just a fantastic finance director. And one of the things that we've done probably increasingly over the years is really tried to develop specific targets that positions the county board to achieve its goal. In my experience, and I'd like to hear your point of view, Tim, but in my experience, the liaison committee, the liaison committee again is that standing committee that oversees the Health and Human Services Department, for example, or the law committee oversees the Sheriff's Department. They have a very important function as policy makers to establish priorities. But in our experience, what we've found is generally those liaison committees are not necessarily real objective when it comes to establishing the budget. They tend to be very supportive of their respective departments and that's human nature. And sometimes they're not the ones who really have to make those tough priority decisions and pair down the budget to get to a point where it meets the county board's overall goal. The finance committee, and you and I get involved with a lot of that, as well as obviously Chairman Banderstein. But as you think about the county board's process, when they're involved, what have you, what's really stood out in your mind over the years as you've worked with the county board and their involvement with that process? Well, I think probably the best thing that the county board has done, and I know you were instrumental in seeing that happen was that number of years ago, we went to a different approach. Instead of just giving departments, taking their previous year's budget and adding a certain amount to that, we actually look at what do we want the target levy to be for the county as a whole? What do we wanna do for the taxpayers? What's appropriate? And we actually set a levy target for every department. So they knew right up front, here's what you have to work with as far as levy and then you have to make your budget work within that. So I think that's just really been critical to the success of the budget process over the last number of years. The best thing I think we've done. Very good, thank you, Tim. Tim, it was about nine years ago when we established this new budget process, setting these goals and targets to eliminate some of the large swings we'd have from year to year in the tax rate. How do you think the counties perform in the years, five years after that was done compared to the previous five years before we established these targets? Sure, actually I've got a chart here that I think will show that. I'm gonna put this up here. I think they can get it on camera. This one goes back to 1992 and then goes up to 2009 where we're hoping to set our tax rate or have set our target tax rate. And you can see back in 1992 it was fairly high, it was about $7 per thousand. And then it took kind of a roller coaster ride there all the way up to 1999. Then from 1999 on through 2005, it's been pretty flat and that's a reflection of the budget process that was established, I believe when Adam came in, to try to reduce the ups and downs in the tax rate and keep it more stable. And that was very successful, you can see in this period. Then the last four years, what's happened is we've seen a consistent drop in the tax rate as a result of two things. The first thing that happened is that the state imposed a levy limitation that had not been imposed previously. So that restricted local units of government how much they could levy. So that was partially responsible for 2006 and 2007 tax rates dropping. Then in 2008 and 2009 continues to drop. That's really a reflection of the county board and the fact that they've taken a very targeted approach to what is the levy going to be in Shoeigan County. And as you guys know, some of the taxpayers may know and some may not know. This will be the second year in a row that the tax levy has actually gone down. It's not just we've reduced the growth in it, the levy has actually gone down. Last year it went down about 1.2% and the target for 2009 budget is to go down another 1%. And that'd be the second time in 22 years if that's happened. So last year was a milestone, number two, doing it two years in a row is practically unheard of. So it'll be quite a feat to do that. Just a quick clarification. You just mentioned tax levy two years in a row yet of course you're showing a chart here that is the tax rate. Maybe you want to just very quickly clarify well what's the difference between the rate and the levy? Right. The rate can go down and it doesn't necessarily mean that the levy will go down. It's a function of equalized value. So in this case though, however, the rate is actually going, tax levy is actually going down. That's not really reflected here because it's just a tax rate. But you have to look at really where the rubber meets the road is the tax levy. That's what hits the taxpayers pocket. So if you're asking in a local unit of government, how are you doing for your taxpayers? Ask them, what is your levy done? Has your levy gone up? Has it gone down? Most are gonna say it hasn't not gone down. It's pretty rare to see that happen. But how much has your actual levy gone up percentage wise? 2%, 3%, 4%. The state's idea of a reasonable levy increase is 2%. That's pretty much what they've mandated. And I think that's a very reasonable amount to have. We, of course, beat that target two years in a row. Tim, on the levy, the county board can't go up to what is it, 2%? Correct. And how has this been changing in the last few years? Well, at one time there was actually no levy cap whatsoever. There's been a rate cap for a number of years. Since 1992, we've been capped at the tax rate of so much per $1,000. However, that doesn't control your levy because the equalized value goes up. You're able to apply a rate to a higher equalized value so your levy goes up. So really, the rate cap was not all that effective in controlling levy, but it is still in effect. But for the last several years now we've had an actual levy cap so we can't raise our levy more than roughly 2%. So the state, that's their attempt to control taxes at the local level. Whether they've really followed through at the state level or not, I'm not sure that they have. But anyway, that's their attempt to satisfy the taxpayer that they're doing whatever they can to help them at the local level. Tim, what do you think the most challenging issues we face in trying to hold the taxes down? Oh gosh, Mike, how much time do we have? Well, just give us the highlights. Just kidding. One of them that is there, and there's just not a lot we can do about it, but the constant increase in wages every year, roughly two and a half to 3%, which is a pretty normal wage increase, is that compounds, it builds on itself year after year after year. And over time, truthfully, I think that's probably one of the biggest challenges that we face. We've met that with a couple of things. We try to meet that with keeping negotiations to where we can have a wage increase that's reasonable. We'd like to be down to the two to two and a half percent range, often it's three percent. The last couple years it's been two and a half percent. We're thinking three percent for 2009. So that constant compounding of wage increases over a long period of time has a huge effect. Health insurance has been a big issue for a number of years. Not so much now. It's quite under control now with some things that have been done by the HR committee and HR department to really control health insurance costs. That's much improved. That's helped tremendously. Rocking Hill, the healthcare centers have been a huge challenge. And we sold Sunny Ridge, so we've solved a big part of the problem there. And in fact, selling Sunny Ridge is the reason, the primary reason why we've had been able to reduce our levy now two years in a row. Without selling Sunny Ridge, we would not have been able to do that. So it was critical. Rocking Hill still remains a challenge. Healthcare is very, very expensive to provide. But we have a good team in place there. We have a new director. The healthcare centers committee is devoted to doing things that are proactive and to marketing Rocking Hill. And in fact, for 2009, they're looking to reduce their levy by about 500,000, actually more than 500,000 over their prior year's levy, over the 2008 levy. That's pretty big. So they're doing some really good things here. So that's much more in control than it was previously. Unfunded mandates at the state level continues to be a real source of irritation and worry at the local level. Because consistently, we're seeing state revenue for grants for human service programs and other programs, flat or declining. And yet our costs continue to go up. And there's really not been a good response from the state on that. So we have some challenges ahead of us for sure. We have one for this year, for 2009, that's a little unusual, is recession has brought about lower interest rates and short-term investments. We have some short-term investments, so we're losing interest revenue on those. So trying to find a way to mitigate that right now. So we have some challenges, but that's what makes the job fun. And Adam and I love to dig into stuff like that. So I'm glad you do. Thanks, Jim. You're welcome. Tim, you mentioned earlier, you commented that the state cap of a 2% on the levy has, to a certain degree, been a good thing. Because of course, you and I and Chairman Van der Steen and I think the full county board would always like to see our levy increases be modest in that perhaps two, two and a half, 3% range, certainly no more than that. However, the board's also gone on record, rather concerned about these one-size-fits-all caps, though a 2% cap sounds good. The reality is that when you have utilities that are tripling or you have costs associated with your nursing homes doubling or you have health insurance costs skyrocketing along with just the ongoing costs of wages, which certainly you want to give people a fair and appropriate wage, there's been some real concern, not only in Sheboygan County, but across the state that these caps are, you know, they sound good. And though most of us would like to work within them, it may not necessarily be reasonable. We've been fortunate the last couple of years because of the privatization of Sunny Ridge and some other things we've done where we've actually been able to reduce the tax levy. But at some point, we're gonna be back, I think, to two, 3% increases each year. And in those situations, you know, do you feel that that 2% cap is fair and reasonable? Oh, gee, you know, that's a tough question. I think for us, I think a two to 3% I think is doable because County Board has done some really, made some really good decisions that have positioned us to be able to live within that. Is it responsible from the state's point of view to tell us that that's what we have to live with? No, I don't really think it is. I think local government has done a better job than state government at controlling their budget. So I don't think it's reasonable, but you know, it's just what we have to live within. But you know, for Shboyton County, I just feel fortunate that we're in a really good position financially to be able to address whatever the state brings down. And I've said it before and I'll say it again, there's nothing the state can do to us that will kill us is we're in good enough financial condition. They'll go under well before we would ever go under. Pretty bold words. Very bold and I, yeah, I believe in them totally. We've talked a lot about holding the line on taxes, reducing taxes, and of course, there's a lot of public support for doing that, especially with today's economic conditions. But with that said, the County Board has also made a heck of a lot of investments in this community from an economic development standpoint and educational development standpoint. A number of areas where they've invested capital improvements, please touch on some of the things that have happened. Yeah, that's some of the exciting stuff. Right here at UW-Shaborgan, the Technology Center has been recently completed. It's beautiful, you know, I've been in there I think once or twice. I don't know if you've got, I know Adam, you've been in there, Mike. I, you've probably been in there too. It's incredible. The science building a few years ago was completed. We've used that a couple of times for conferences that we've had for leadership forum. Just an amazing facility here and getting better all the time. So those are some of the good things that the County is working with the UW System to improve out here. The airport, extremely exciting things going on there, expanding the runway. They can bring in jets with more fuel, they can fly. Actually, I think they're approaching the point now where they can take off from Shaborgan and if they wanted to fly to Moscow or somewhere equally far away without stopping to refuel. So really amazing stuff and Morgan Aviation planning a development at the airport that looks absolutely unbelievable if they can bring in the number of jobs that they're talking about bringing in and it looks pretty positive for them that they'll be able to do that. A new line of aircraft will be coming out of there. Very, very high tech business jet type of aircraft. So airport's just an exciting, exciting place to be. Then there are the kind of more routine things like phone upgrades, computer system upgrades, software upgrades, ongoing roof replacement throughout the county trying to keep our buildings up to date and expansion of our trail systems. Interurban Trail is something that they've been trying to really finish that off for a number of years. And then also, more brand new software program at Human Services which will replace many of the, the aging software programs they have there. That's been a major project. So lots of, lots of exciting stuff coming up. And a lot of things that people wouldn't think about perhaps if they're not watching this program or following things with the newspaper. I know we've said it during this program before but with the Acuity Technology Center and the Science Edition here prior to that, recently UW-Chaboygon was co-located here with UW Extension, UW Extension moved here from falls. This facility is one of the best, if not the best, 13 year camp, two year of the 13 campuses across the state. Beautiful facility. And if you haven't checked it out, I would encourage you to at minimum poke your nose into the new Acuity Technology Center. Just gorgeous. In fact, Dean Al Harderson recently sent some correspondence to Chairman Van Der Stien and myself saying that since that addition's been put on, the numbers of people that were going to the old Learning Resource Center, essentially the old library, which was about 10,000 a year if memory serves, has now gone to about 40,000 people a year going into the new Acuity Technology Center. So just beautiful. And the other area real quick, the airport as Tim mentioned, if you haven't been out to the airport recently, check that out. Chuck Mayer of the airport manager is doing a fantastic job and just some wonderful infrastructure and improvements out at the airport. When the county boards going through this process of trying to meet Chairman Van Der Stien's challenging goal of a second consecutive year with a modest property tax levy reduction, and all the 22 departments are clamoring for additional resources and there's only so much to provide, how does the county board go about establishing priorities and making decisions on where they're gonna provide these limited resources? Right, the budget process is critical. Setting a target right up front, here is where we wanna go for 2009 or whatever year we're dealing with. Here's our levy target and giving that to the departments and let the departments run with that and find the way to do that. So the budget process and how we look at that and I think now how we look at it is very, very successful is just key to that. We also have a five year capital plan. That's where our larger expenditures like airport expenditures, major building renovations and additions, things like that are in our five year plan. That's really a separate budget process from the operating budget. It equally is important and is also scrutinized closely by yourself, the chairman, the finance committee and other county board supervisors. So the main budget process, the five year plan budget process and then Pepsi. Pepsi was initiated back in 2000. Pepsi and people are drinking Diet Pepsi. What do you mean by Pepsi? Program evaluation and prioritization. Committee? Committee, thank you very much. I was thinking process. No, that's not a P on the end. Extremely effective. That's a few years old now but I've heard rumblings that it's gonna be updated which I think is an excellent idea. I think that's something that Mike wants to do. I think it was very, very effective and I think it's gonna be more effective as a budget gets tighter. Pepsi can be used where we have limited resources to determine where do we fund? If we run out of money and don't have enough funding, who gets funded first? Which programs get funded first? So Pepsi I think will be critical. If memory serves, there are 1,922 local units of government in the state of Wisconsin. And Tim, you were a huge part, as you know, of this program evaluation and prioritization process. And we are probably one of a dozen local units of government out of that nearly 2,000 that have actually gone through the painstaking process of reviewing and evaluating and ranking every program and service. And when we did that a few years ago, we learned we had about 206, 207 programs and the county board and department heads now can use that as a tool when it comes to making budget decisions. It's been very valuable. Absolutely. And Mike's looking to update that next year and that's certainly something we're gonna pursue. Good, I think it's a great thing to do. Moving along here, the public that's watching this program and may have some interest in one of those 206 programs or services or something they wanna see added or something they feel is not a good use of taxpayer dollars. How do they get involved with the budget process? How do they have input? Couple of ways they can do that. One way is they can go to a standing committee meeting. They can go to a finance committee meeting and look for the agendas. Those are posted online in our website. And on the agenda, it'll tell what budgets are being considered. So if there's a department they're interested in, check out our website, find out when the finance committee is meeting, attend a meeting, they're open, all open to the public. So that's a good way to do it. Or they can go to the law committee or another committee if they wanna see specifically programs that would be administered by the law committee. Can they just show up at the last budget meeting at the county board or is it better to get involved a little earlier? Well, it's probably better to get involved earlier. And that's where the decision making, initial decision making takes places at those committee meetings, finance committee and the other committees. So that's really a bit of better flavor for how the budget is developed by doing that. But if you don't do that, you could still go to the public hearing. That's October 28th, six o'clock, fifth floor of the courthouse and county board chambers. That's where the public hearing will take place. Anyone can come, speak to the budget, say anything they want, ask any questions that they want. And also the county board that night goes through the budget. But department by department and can make changes, additions, deletions, whatever they want to do to the budget they can do at that point. So it's a real good night to show up if you have some questions about the budget or just want to make comments. What was the date again on that? October 28th, six p.m., fifth floor of the courthouse. And as Tim mentioned, not only is that a good forum because that's the public hearing for the county board to hear from you before the full county board. But all three of us would tell you from experience that the sooner you get involved with the discussion, the better. And if you attend one of the respective committee meetings, whether it's a law committee, if it's dealing with the Sheriff's Department or health care center, if it's dealing with Rocky Noel, health and human services, dealing with the health and human services department. If you attend a committee meeting sooner rather than later, your input I think might have more influence on being considered and perhaps improving something. But we will say this, nearly everybody puts the pressure on the three of us and all of those county board supervisors to hold the line on taxes. But we rarely hear anyone suggest a program or service that can be eliminated or reduced. Rarely does that happen. We almost always hear people suggest a program or service that can be beefed up or needs to be expanded or needs to be added. And if you have any thoughts on how we can deliver our programs or services more efficiently or if there's a program or service that you feel is not a good use of taxpayer dollars, contact your county board supervisor because we need that input. It's very valuable. So again, public hearing on October 28th at six o'clock. Tim, in the final minute we have anything else you wanted to share or comment about your department or staff? Yeah, I'd like to thank my department for all the work they do, ton of work throughout the year on the budget and do a very good job and support me. I couldn't do what I do without them for sure. So, Mary Wegman, Deputy Finance Director and everybody in my department are incredible. Big thanks to them. Outstanding. Well, thank you for joining us and thank you, Mr. Finch, for being here today. You're welcome, thank you. It's a busy time and it's a very important time and the county board is working diligently on your county budget and what ultimately will be your property tax rate and how much you'll be levied to support those programs and services. So get involved. If you have questions, contact your county board supervisor. Next month our guest will be Mr. Mike Tobinheim, the administrator of Rocky Knoll. As Tim mentioned earlier, doing some fantastic work at Rocky Knoll, really more proactive, competing more effectively. It looks very encouraging. In fact, Chairman Van Der Stien had a letter in the Shiboykan Press that if you didn't see, you might wanna check out. Very good news, future looks bright for Rocky Knoll. So with that, on behalf of Chairman Van Der Stien and myself, thank you very much for joining us.