 County government working for you this is our monthly TV show to bring in you the services and the People that bring you the services for Sheboyin County government This month in our show. We are have is our guest Tim Finch the finance director Adam Payne is on my left Adam and I are the cosponses of this show and We're gonna be talking about our finance department today and Tim is our guest The biggest Project that the county board does every year is past the budget sir the document that affects county government the most Facts the taxpayers the most and we're gonna talk a lot about the budget today But Tim why don't we start by just giving us a little background as to your The length of time you've been with the county in your history with county government. Sure. Thanks, Dan I've been with the Sheboyin County about three years now with specifically with the finance department since May 1st of 2000 so it's been a couple years now and in the finance department where a lot of action takes place as you know, and it's Always exciting never boring and a lot of challenges there, but it keeps keeps life interesting Living the city of Sheboyin with my wife Linda and my daughter Ashley. Hi Linda and Ashley And we enjoyed here. It's it's a very nice place to live and I've enjoyed working for the county side That's it's been a nice experience for me and you've been with the finance department for a couple years now what Why don't you fill us in just a little bit on the roles and responsibilities the finance department sure they're far reaching and really reach Touch a lot of a lot of different departments all the departments as far as budgeting goes. We're responsible for all the countywide financial functions accounting Doing financial statements accounts payable payroll a big part of our job is to do Consulting if you will or or helping of departments dealing with different issues billing issues Different types of accounting things that come up So budgeting is probably one of the biggest things we do in auditing Working with the external auditor do the annual audit those are the two real big ones But there are just a lot of things that we get involved in We mentioned the budget several times now and I said that that was the the one document that the board passes That's the most important without without money our departments can't function They rely on the county board to pass that and then to levy the tax for it Maybe you could just give our viewers just a little insight as to the process that we go through as we develop that budget sure be glad to Excuse me. It is it is a long long involved process. It begins early in the year actually March or April Adam and yourself and and others will start the finance committee will start looking at what's coming up for the year ahead You know, what do we expect? As far as issues or what do we need to deal with with the budget and start getting kind of a general idea of what the targets are Going to be what's going to happen with the tax rate, you know So it really starts March April then in June. It starts in earnest with our budget kickoff Which is a meeting with the finance committee Yourself would be in attendance administrative coordinator and then all the department heads come and everybody gets the The flavor for what the budget process is going to be for the upcoming year and what the targets are what they need to shoot for For for 2003 as it's been for our last several years They've given a directive That they have to keep their spending to a zero percent increase for capital outlay and in operating expenses So it's a time when they come in and they they learn what the finance committee sees as In the next coming budget year and then they go back and start working on their budgets then in July and August They have to come through and meet with Adam and myself and go over their budget before they go back to their own committee So that's kind of like a preliminary review. We go through their budget make refinements or suggestions that We think that they need to do challenge them in a lot of areas To justify what they're budgeting So that's kind of the first step. They have to get past administrative coordinator and myself then they go to their liaison committee So at that point then they go through the whole process again take their budget in if they've changed it at all You know, they go over that they explain how they came up with their numbers And if they have any difference between last year's budget and the new budget, they have to explain that in detail You know how they came up with additional costs. We call them variances. So if they're variances, they're gonna have to justify those very carefully in order to get those funded Then there are after that there are meetings with the finance committee so the finance committee will go over each budget and the department heads and leads on committee members will be there to Justify and to support their budget. So that's the finance department committees kick at the at the budget then in October The there's a notice published for public hearing, which is also in October That's when the public can get real heavily involved if they want to and they can come to the public hearing and ask questions and make Comments and the county board also does a line-by-line review They could request to look at the detail for any any item in the budget and There are thousands of different accounts, but if they want to go into a one account they can do that So they get a chance to go over it in detail at that time and then November It's finally adopted with any last-minute changes. So in November the final product is finished You mentioned that in October there's a public hearing on the budget and the public can get involved at that point But even through this whole process when the liaison committees are meeting when they meet with the finance committee These are all public meetings and and if the public wants to attend any of these they can they can find out Either on our website when these meetings are or or call your department finance department Find out when some of these meetings are interested in a specific department those meetings are all open to the public Yeah, that's a good point because if the budget process starts very early in the year as we already talked about They don't have to wait until the county board meeting to get involved Any finance committee meeting is open to the public and they could start coming in June July and almost every meeting There's something going on with the budget at the finance committee. So you're right. The opportunity is there and if they really are interested To really know what's going on that would be the best thing for them to do you mentioned earlier that that we set targets And everybody knows what a target is it's something you throw the dart at or you're shooting at How how does the committee and the finance department set these targets? What what information do they use to do that? Sure, it is a cooperative effort There are a lot of people involved in setting targets beginning with the the finance committee administrative coordinator county board chairman Get together and and they just use the best available information. They have about what's what's coming up As an example, we know for next year One of our big issues is health insurance the costs are going up Incredibly going up and it's not just us others are experiencing the same problem, but by putting together information things that we do know are coming up Throw that together and start looking at what's going to happen to to the budget There are some other major issues wages and benefits are one of the things that have to be looked at We know that pretty much goes up every year But we need to control that that's the biggest cost for Shibuya County is wage and benefits So there has to be a concerted effort to try to keep that Under control somewhat so you know those kind of things go into looking at the How we set our targets and the decision. What do we want to do with a tax rate? Do we want to stable tax rate? Is it okay to have the tax rate continue to go up? So there's a lot of things to look at but it is a joint effort with a lot of people You mentioned the tax rate Obviously if we if we don't reach our targets, we we exceed them Our only option is to raise the property tax Are there limits as to what Shibuya County can can tax our property tax? On the property tax absolutely there are limits actually we're limited by the rate that was in effect in 1992 state statute Capted at that 1992 level. So actually that's what we're what's what our rate is our actual dollar levy can go up because equalized value goes up and The dollars we levy It's the result of multiplying the rate times the equalized value So if the rate stays the same, but the equalized value goes up we will generate more money But we can't change our rate. We can't increase that actual rate So the only the only relief we get each year and increase levy is because the equalized value goes up Fortunately our costs are actually below that maximum rate right now that that the 92 rate that they set So we have some cushion between the rate we have now and what we could have as a rate So there's a little bit of room there, but there's not a lot of room How much how much about 12 cents right now? So so our rate right now is 648 in 2002 so the maximum we could add to that rate per thousand is 12 cents. That's correct As the departments go through their budgets and develop them They report to their their liaison committee you mentioned that before What is the role of the liaison committee in this budget process? They're the they really are the ones who should develop the budget that the department head will Will give them a budget that they think is appropriate for the department, but the liaison committee They run the department. I mean the department head reports to them They make the decisions the county board supervisors are the ones their decision makers for the county So it really it's really their budget. They need to look at what the department head brings forward and ask a lot of questions You know, is there a reason why your costs have gone up? What's happening to happen with your revenue? Can you increase your revenue of sources? They they're the first line of defense and keeping the tax rate down So they need to do a real thorough job at that level. So just using an example The sheriff's department Reports to the law committee That's their liaison committee. So as the sheriff's department develops their budget They bring it to the liaison committee, which is the law committee the law committee has Responsibility for approving that budget before it goes to the finance committee and then ultimately to the county board so it's their responsibility to look at that budget to to make the department justify the expenses that they have in there and And really go over the fine tooth comb. Yes, they do. It's really it's really their budget Department head may prepare it for them, but ultimately it's their responsibility. So They they are the ones who really need to be decision makers yet at that stage the process as to what do they want in that budget? so we have 23 different departments and reporting to 11 or 12 liaison committees How does this all get pulled together into one final county board budget? Well, it's a fun process to say the least in the finance committee really is the one who pulls it pulls it out together with the help of the finance department They end up reviewing every single budget. They sometimes make hard decisions about what to do with individual budgets They have a meeting It's a finance committee meeting But the liaison committee and department head are invited to go over those individual budgets and so a lot of those of the Things are hashed out at that point and and they will put together a final budget for submission to the county board and Just could you just repeat that the timetable at the end there where we actually pass the budget by state statuators There's there's a window of time where we have to pass sure sure in October We have a public hearing in October also in October There's a line-by-line review by the county board where they can scrutinize anything in the budget and then in November It's adopted right around the first second. We can November it'll be adopted good Tim you gave a real nice overview of the budget process and the targets and the goals and in 1999 We we instituted a new budget process here I think at the time Dan you were chairman of the finance committee and vice chairman of the county board Our viewers are probably wondering well, how have we done as this process been effective? What's your opinion? I think it's been very effective. We can go to some of the charts to take a look if we want to Focus on what's kind of happened with our county tax rate For Splating County. We've got 1997 to 2002 No, we don't know yet for 2003 where we're going to be but our target is to be right where we're at in 2002 is 648 for the county rate. So you can see from 97 to 99 the trend was up Was a pretty I mean, it's a very definite trend up and in the rate in 2000 It leveled off. No increase in the rate 2001 it did bump up a little bit here and 2002 it dropped back down. So there's quite a nice plateau that we've reached here for the last Last three years anyway That's a nice improvement over you know what we saw before so I think definitely the things are working setting a target So it's an effect and I think you have another slide there that gives a little more specifics about that tax rate And how and how in fact it has changed over the last few years. Sure the actual rate itself You can see here. It was quite a big increase from 97 to 98 was quite a large increase 8% increase in the rate and then Another more than 8% increase in the rate of 99 2000 no increase So the rates stayed the same from 99 to 2000 a little bit of an increase here less than 4% an actual decrease here We went from 650 in 2001 to 648 in 2002. So Actually for 2002 we were able to drop the rate Somewhat now this this doesn't tell the whole picture because the rate doesn't tell how many dollars we actually increase Levy to from the taxpayers The rate is one factor, but then the equalized value is the other so when you multiply those two together You get an actual dollar increase in the levy and you can see There was over 5% probably 6.5 7% here over 15 here almost 15 here And then once the targets and the new process kicked in the rating the actual levy Increases have been significantly less for the last three years. So it's had a very good effect So in the last three years and this is a lot of information to absorb absorb in the last three years We've had less than a 3% increase in our tax rate Combined in the last three years correct when you look at our tax levy people may wonder Well, if we've been that successful holding the line in the rate Why is our levy going up and that gets right back to what you said earlier when equalized value goes up when their property Values go up. We do see more revenue coming into the county So though we've held the line with the rate and that continues to be the goal for 2004 It isn't as though county government is stagnant. We're still seeing some revenue coming in through property values Correct, and you really you do need this additional revenue Even if your rate stays the same you're gonna get as you said a bump in revenue because the equalized value has gone up But you have to account for Some kind of increase in wages and benefits because you know that they're gonna go out pretty much every year So the bump in equalized value gives enough time basically to cover those things as long as we we can control that Now I know the three of us take a lot of pride in the fact that we've been successful The last few years and holding the line on the tax rate And as you talked about the process one of the things that we didn't mention was the leadership forum that we have Each year what's been the value of that that's something that Dan was involved with implementing and How was that contributed to our success? Well, I think it's done a real good job It's brought the county board supervisors into the loop with the finance committee where maybe Maybe they wouldn't you know normally get that information what the finance committee uses to make decisions on targets You know what's out there intergovernmental transfer health insurance situation topics that the finance committee deals with all the time But other committees maybe wouldn't deal with that So the forum is a real good opportunity to give them the kind of information that they need as the ultimate decision makers That they are on the budget To understand where do we need to go and what kind of things do we need to look at what are the challenges facing us? So it's brought even everyone together and made sure that they got some good information I think we've seen a lot more ownership for the process and it also Again your point earlier about the liaison committee being the first line of defense to keep that tax rate down They have more ownership for the goal and therefore they've done a good job Expenditures let's move on to give our viewers a feel for expenditures We have over a hundred and thirty million dollar budget here in Sheboygan County Where are those dollars going it interesting? This is something that I think most people would find I Think kind of interesting, you know where we spend our money And the pie chart is a great way to see that because you can really see of the total piece of of the pie Which is almost hundred thirty two million dollar budget in 2002 and we know this will go up somewhat for 2003 But probably the the spending Ratio is here probably won't change that much the biggest by far the the biggest Chunk here is you're going to health and human services So the the white piece of the pie Health and human services sets are our largest largest department Closely followed by health care centers here in the red Also over thirty one million dollars in total expenditures and one thing you do have to realize is that They cover the lion's share of their expenditures with with revenue They have charges for services they can charge Medicaid Medicare Etc. So they do cover a lot with revenue They generate health and human services does generate some revenue, but not nearly the amount that health care does So mostly expenditures Really almost half are taken up by two departments in the county right there And you've got a pretty sizable piece almost 19 million here for General administration would be all the general fund departments Registered deeds treasure finance etc Another good-sized piece here, which is in blue And I'm struggling this public works. So highway department Airport etc. So there are a lot of a lot of dollars goes into there Then the some some smaller pieces over here Justice in law actually it's not so small over 50 million dollars sheriff clerk of courts DA etc. So that's Fairly fairly expensive and then the the more minor players here the smallest piece would be Environmental planning and resources land conservation And then the rest is brought up by debt service here over six million dollars for debt service That's to pay for borrowed money to do some of our bigger projects construction projects So so as our viewers are looking at this and it may be difficult to pick up Please if you would like copies of this information or a better feel for where the expenditures are certainly contact or finance Director or myself and we'll forward this on the big four as we like to think of them are the highway department health and human services the health care centers and the sheriff's department those really make up the bulk of our overall expenditures and It's difficult each year to achieve the goal challenging Certainly to achieve the goal of maintaining that rate that means holding the line on expenditures and you touched on earlier Tim The challenges we face one of the largest is salary and wages Why don't you talk a little bit about some of the challenges we have with maintaining that tax rate? Well, the the the wage and salary is almost half of our entire budget So any increase we see in that category is gonna gonna have a big dollar impact even a small percentage increase It's gonna have a big dollar impact. So That's one thing that going you know in the future we look at we have to control wages and benefits There are many of our employees are represented by unions So it has it's gonna have to be a cooperative process between the county and the unions to to keep those costs In line so that though that's the biggest challenge. I think we face in the future. The next biggest would be health insurance We know that costs are going up everywhere for health insurance for a variety of reasons Usages up for Shboygan County among its employees the actual number of claims is increasing So that's part of the issue with us and costs are going up as well So we have to find a way to to to control that We're looking at about a 29% increase in health care costs for the 2003 budget. So that's significant 29% 30% that's a couple million dollars in health insurance just in health insurance So and that point is a real good one to emphasize we talked earlier about equalized value or property values going up We're anticipating about one point eight million dollars of additional revenue Well if our health insurance is going up to two and a half million dollars alone I think people can begin to recognize just how challenging it is to Offset the salary and wage increases that people expect each year Yeah, we've got a real effective workforce here, but we have eight different bargaining contracts to negotiate with and That's a challenging process. It's very very challenging that often there are not easy answers to how you compensate your employees fairly and you know equitably and Still try to control the budget when it's half of your budget. What about just general operations? We talk about half being salary and wage, but paper costs more and laying Blacktop costs more each year. How are we doing that regard? Well, we're we're telling the departments they have to hold the line and Some departments can't do that. They come in with a variance request in their budget, which means that If they've been told they can't have an increase in an in a line item from 2002 to 2003 and they have to have an ink They say they have to have an increase they have to justify that with a variance request So a lot of departments have been able to absorb that zero percent increase and continue to do the job with the same dollars some some can't People can't get away without reading the paper or hearing on the radio all the state budget Implications and shared revenue and we've had some programs on that and and certainly have been talking daily If not weekly about how we're going to respond and prepare What at this point are the implications of the legislative compromise that the governor is now considering what? What's happening for a county specifically short Shabuigan County? Well, thankfully it's not what the governor proposed because what he proposed was Losing all of our state-shared revenue in 2002 after our budget had actually been adopted so three point seven million dollars of revenue we had counted on would have been lost so You know that didn't doesn't look like that's going to happen and and actually it doesn't look like anything's going to happen in 2003 but in 2004 we stand to lose About between five hundred thousand a million dollars in state-shared revenue, but that's down the road a little bit So we have some time to to prepare for that I have some time to prepare and the county board just took action to extend their hiring freeze through 2003 to garner those savings and Prepare accordingly that was significant. I think the fact that they they did Ratify that or not ratify it, but they extended it because it was only temporary before That was crucial that that happened. So I was glad to see that that they did that. Thank you Tim. Well done Tim you talked about on your charts how we have controlled the levy the rate at least and and have been able to do that over the last three years during that time we've asked the departments to be pretty lean on their on their budgets and their capital outlay and and operations and one of the ways we asked them to do that was to be a little creative and Innovative as they developed their budgets. Maybe maybe there's a new program that is needed, but then we need to eliminate an older program Could you just highlight a few of the things that are maybe in the future coming up as to some of the improvements? We can see in county government even though we're trying to keep a flat flat rate Sure every year we prepare a five-year capital plan. It's something that the both the executive and finance committees are heavily involved in and The county board then will actually look at that make determination There are always things that you need to do, you know big projects that you need to do So we do have some coming up for 2003. The largest is a science edition right here at UW-Shabuigan It's over four four million dollars project costs. So that's in the five-year plan for 2003 County Highway Project to relocate County Highway O and that's for the airport so they can expand the airport That's a large project. There's some other airport improvements that they want to do and courthouse improvements to the Heating and air conditioning system and some other items and software and computer hardware upgrades seem to be just a Continual thing that we're dealing with, you know, you'd like to get away from that at some point But it's just impossible to do because with the technology the upgrades just come constantly So there's always some of those things in the technology is not inexpensive. It is very expensive very expensive One of the other things that that we've talked about through the course of this half hour is the public input and The if we have cuts if the public waits until after we cut then we hear from the public you took away the service from me the public has to inform the county board as to What level of service they would like and what they're willing to pay for and so I really would like you to one more time Just go over a little bit how the public can get involved and how the public can let us know what their concerns are What level of service is they would like to see prior to us passing the budget instead of telling us after we pass Sure come to the finance committee meetings They meet every Thursday at 1 30 in room 1 1 9 of the administration building come to those meetings That's that's really where the rubber meets the road when it comes to the budget And they'll have a real good understanding of that process and then attend the public hearing in October That'll be advertised in a newspaper. So the date will be in the newspaper. It'll tell them where to go what their preliminary budget is come to that meeting and Ask questions at the public the public hearing portion of the meeting ask questions about the budget But though they'll really learn the most if they come to some finance committee meetings So I would I would encourage them to do that and at minimum if they don't do that to contact their county board Supervisor the representative and if they don't know who that person is they can contact the county clerk's office and absolutely will be provided absolutely and to come to a public meeting and Comment on the budget without seeing the budget is hired to if they like a summary of the budget They can go come to your finance department and get a summary of that they can contact our office We're in the second floor of the administration building. Yep. Thank you, Tim We'll probably get you back on a show closer to the budget and and see how we're doing sir My pleasure next month. We're gonna have Dale Pulse the administrator of our healthcare centers as We tape this in July we're moving consolidating our companies the health center residents into Rocky Null and Dale will come and let us know what have we done in that area and in the future of our healthcare centers. Thank you