 Welcome to Sheboygan County Government, working for you. My name's Adam Payne, Sheboygan County Administrator and co-host of this program with Chairman Bill Gehring. And today, we're very pleased to have our guest, Tim Finch, our Finance Director with us. Good to have you with us, Tim. Thanks, Adam. Bill. Tim's gonna talk about the roles and responsibilities of the Finance Department, and let me tell you some very important responsibilities, especially now with the development of the budget process. Tim, please begin with a little overview on what are the fundamental roles and responsibilities of your department. Sure, we do a number of functions. I've got a list here. I'm just gonna kind of run down through, and I may touch on a few of them. Budgeting is our number one thing that we do. We're gonna talk a little bit more about that today, but that's just a huge function of government. External financial reporting, we do an annual report every year that's audited by an external auditor. Counts payable, we pay all the bills for the county for all departments. Counts receivable, internal auditing, every once in a while we'll look at something on an internal basis, and we're responsible for doing that and then making recommendations. Debt management, internal controls, financial forecasting, and financial forecasting comes into play when we do fiscal notes for just about every resolution and ordinance that's passed. Sometimes we don't, but most often we do, so we have to give to the board some kind of an analysis of what the impact is gonna be. And then financial policies and procedures. So we touch on pretty much everything related to finances for the county. Now I hope we're not losing any of our viewers cause you're probably expecting, uh-oh, here come the numbers and the charts and the graphs, but let me tell you all of that is critically important for Chairman Gehring and myself and the county board to make budget decisions every year. And the work that Tim and his staff do are just paramount for all the departments as a support group. I was probably a little remiss though. I asked you to get right into the roles and responsibilities of the department and some of our viewers might be wondering, well, just who is this Tim Finch and what's he all about? Why don't you share a little bit about yourself, Tim? Sure, I've been in the finance department since May of 2000, as you know well. You were in place and involved in the hiring process. Prior to that, I actually worked at Sunny Ridge for about nine months as the accounting manager. Prior to that, I was in Kenosha and I was a CFO for a corporation in Kenosha for 13 years. So this is kind of work I've done for a long time. Really enjoy it, I enjoy Sheboygan. We were new to Sheboygan at the time that I took the position, but we really like it. It's a great place to bring up a family, a very nice community and a lot of things here that you wouldn't find in a town of 50,000. So very much enjoyed here. Enjoyed my job, it's very challenging. As you know, we're involved a lot and a lot of the things that UC is important are financially driven things. So luckily I get to be involved in those things which I find very exciting. It's a challenging but it's a very rewarding position. Tim has a key responsibility, obviously, as finance director. I have the pleasure of working with 23 department heads but probably work with Tim as closely as any department head because of the budget responsibilities. And I can tell you, he's been a breath of fresh air since we've hired him and he's been in that position. Tim, we talked about the annual budget process and you've got your sleeves rolled up here in the midst of that. We've been meeting with departments but you really provide a leadership role and with that process. Give our viewers a flavor for, well, how does the budget process work? When does it begin? When does it end? What are some of the fundamental steps? Sure, it's exhausting. Adam and Bill, you both know that it starts really early in the year, March or April. We start to think about what are the challenges gonna be for the coming budget year. So we really begin, it's almost a year-round process but March or April, we'll start kicking around ideas about what we think's gonna happen. What do we see as our biggest challenge? Then this year in 2006, for the 2007 budget, we actually started talking budget at the leadership forum on June 7th, the budget kickoff, which is where we give the targets and guidelines to all departments that was on June 27th. Then departments go back and start working on their budgets from that point. Then they have timelines. July and August is when they meet with their liaison committees, get their approval of county board supervisors at the committee level. Then they have to go to the finance committee, get support from the finance committee. Miss One Step actually, before they go to their committee, they have to meet with you and I to, we're kind of the initial oversight of the budget to make sure it meets the parameters that have been established by the finance committee, the chairman, yourself. So they meet with us, they meet with their committee, then they have to go to finance. So there's like three rounds in there that they have to get through. At any point, changes can be made to the budget that they're requesting. And finally, if they get through all of that, then they go to the county board, we'll review the budget on October 31st. There'll be a public hearing and an actual review of each budget. So it's quite intensive. Then on November 7th, would be the final adoption of the budget by the county board. So long process. Now for viewers who have followed this program over the years, they know we have roughly 23 departments, about $150 million budget. We've got over 200 programs and services and a 34 member county board that of course you and I ultimately report to and that we rely on for policy implementation and decision making. As county board, obviously they adopt the final budget but along the way, there's 10 standing leads on committees that have a very important role. Please touch on that a little bit. Yeah, it's kind of a marriage in a sense because the department head is responsible for bringing together a budget that's presented to the committee but the committee really has oversight for their budget. It's really the committee's budget. So that standing committee has to, they have to believe in it and they have to support that budget that the department head brings forward. They're really the first line of defense so to speak to make sure that those targets that have been established are going to be met in the budget process. So the department heads will craft that budget but the standing committees are the ones who endorse it and bring it forward then to the finance committee. And so many people I think don't think about county government unless it impacts them directly but obviously every two years they're electing a county board supervisor or representative and if they want to have some input on that budget whether it's health and human services or law enforcement, what have you, clearly that's someone they need to be reaching out to. What would your advice be? Are they better off getting involved with that budget process earlier in the game or as it all comes together in the end? Oh absolutely, earlier the earlier the better. If they can find time to go to some of the committee meetings that would be the first chance for a citizen really to see the budget and see what's involved for a specific department. If they can go to those committee meetings that's tremendous. The next step would be then it goes to finance and finance committee reviews every budget of every department and that's the next step where a citizen can go. Those meetings are all open to the public and that's where really a lot of heavy lifting starts to get done so I would encourage anyone to participate in a finance committee meeting. If they can't do that, the county board then when they do their line by line review on October 31st there is a public input portion of that agenda so anyone can speak to the budget that wants to do that and if they wanna get the budget ahead of time they can kind of turn to have the finance department. We can get them copies of an individual department or whatever they would need to do. Excellent, thank you Tim. The budget development process over my years on the county board 18 years now has been kind of an interesting process but in 1999 with Adam and the finance committee and the county board's acceptance it took a major turn and that turn was that we developed targets so that a department would be asked to hit a certain target so that we could kind of balance off the budget not having peaks and valleys in the levy. How have we done in the last five years and then the five years before that Tim? Have we achieved that goal? Sure Bill, actually in my opinion it's been very, very successful in doing that. We've got a chart that if we could go to that chart we'll kind of illustrate. This is a chart of the tax rate for Sheboygan County and you can see it's kind of a roller coaster ride from 1990 through 1998 in that period ups and downs and then as you said with the new budget process put into place that leveled out and you can see it's quite level throughout here now. It started to drop a little bit due to the state levy cap that we're mandated to keep our levy to within a certain limit. So that's really partially responsible for the reason this has kind of dropped here but the stability that's come into play since 1999 is it's apparent, I think the process has done real well. Actually the process of keying in on a levy target I think is an incredibly successful way to do it. Otherwise you really have people coming in from all different point of view of what they think it a budget should be. When you focus on a levy target by department you have a real good target to shoot at and I think it's worked very well. For a number of years the county board has operated under a rate limit but within the last couple of years a levy limit was established. Can you elaborate a little bit about those and how it's affected our budget development process? No, it's been real challenging because the levy limit calculation or levy limit restraint that we have now is much more restrictive than the old rate limit was. Both are still in effect. We still have the old rate limit and now we have the actual levy dollar limit in place and that's that as I said more restrictive. So currently for 2007 we're looking at keeping our levy increased to no more than 2.36%. And how they develop that is that's the same percentage as the state has determined net new construction in Sheboyin County has gone up the equalized value has gone up that much. So they've taken the position that counties should not have to raise their levy any more than that increase in net new construction. Now whether that's really appropriate or not I'm not sure but they've taken that position so our levy for 2007 as an example can go up no more than about 1.05 million dollars. Okay, now as you've said that causes a lot of difficulty for us as we develop the county budget. There are a number of things that we have no control over that really impact our budget. What are some of those items that we really don't have a great deal of control over? Wages number one we don't really have a great deal of control over wages because we have union contracts we have eight bargaining units. Pretty much we're locked into comparable across the board wage increases as other counties would have and historically that's been around 3%. Now rates last year went up 2.5% and we're budgeting that for 2007 but we're pretty much locked into that there's not a lot of choice we have in that. Health insurance is the other thing we really have no control over what happens with health insurance other than maybe to change our plan design but we have been as both of you know killed with health insurance increases over the last five to six years 125% over the last five years so it's just been a huge problem and continues to be one not just for us but for most businesses. What about operation of our two health care centers? What do we actually have to levy for both Sunny Ridge and Rock you know all together? Right that's another one of our one of our bigger challenges we're levying now six million dollars a year for both facilities and that's increasing. Again half of our employees probably at the health care centers so we have significant wages and benefit costs to the health care centers and unfortunately the reimbursement is not increasing and in some areas it's going down. The federal government used to subsidize county nursing homes for Medicaid residents since the Medicaid rate is fairly low and they still do that but it's a much lower rate we've lost six million dollars in federal reimbursement since 2002 so that continues to be a huge challenge. You've touched upon one way that the state has impacted our budget are there other ways that the state budget deficit has kind of rolled downhill and impacted us? Yeah yeah unfortunately we've got a couple of areas and we've looked at these in the past and it continues to be an issue human services our health and human service department we have another number of mandated services that we have to provide but reimbursement from the state has not kept up with our cost. When we have to send a juvenile to a correctional institution a state run institution the costs there are hundreds of dollars per day and they've increased about 10 to 15% per year over the last few years but there's been no increase in reimbursement so we have to find a way to meet those challenges the court system is another example those are we're mandated to provide court services but the reimbursement from the state is not there and in fact the last time we looked at it Chavuig and County was providing about two million dollars of tax level just for court related services so those areas continue to be a challenge the state isn't a budget buying just like all local units of government are so they don't have additional money to pass on so we're an arm of the state if they have fiscal troubles it's gonna trickle down to us so it would seem that if we hadn't developed these targets and other ways to better manage our budget we could really be in a world of hurt with what's impacting us from the outside yeah as a matter of fact if we take the five years prior to changing the budget process and the five years after we just about cut in half the percentage growth in our tax levy so if we had not done that the growth in the levy would have been probably an additional about seven million dollars in tax levy so it has had a huge positive impact on the budget thank you Tim nice overview of the challenges when I think of the last five years with as you said a hundred and twenty five percent increase in health insurance which in real dollars is about six million to over twelve thirteen million you look at intergovernmental transfer funding that was reduced for our nursing homes in real dollars which went from about eight million to a low of two and a half million and then just the ongoing increases and other utilities and fuel and operations I just think it speaks volumes to the county board and department heads and our overall organization as to the adjustments that have been made and the budget process every year we make incremental improvements and Tim as you know you're a big part of that and have an important leadership role but I was pleased with your last statistic we often in government don't talk about the accomplishments what we generally do is talk about the problems and what we need to address and how we're gonna make adjustments and the challenges that you just raised but I certainly want our viewers to appreciate that the county board and our management team and I think our employees as a whole are really making a lot of good things happen whether it's the delivery of critical programs and services or whether it's the top notch job that Tim Finch and his team are doing with the budget development again had we not changed that budget process and everything remained the same you're talking about a seven million dollar additional taxes that this community would have absorbed and to reduce that with the other challenges that you just touched on I think is really a remarkable and the organization as a whole should take some pride in that speaking of good things even with the challenges that we're facing some of them ongoing whether it's the levy rate that the state has imposed or whether it's again the cost of insurance or things that we don't have a great deal of control over we continue to make good things happen and there's been some significant capital improvements that have happened throughout Sheboygan County of late please touch on those Tim. Sure and thanks for the nice comments Adam appreciate it a number of good things right here at UW Sheboygan over the last few years as you know the science edition has been dedicated it's an incredible facility now they're underway on the information technology center being built right out here so those are very good projects and of course we've had County hasn't been the only one funding those we've had some very generous donations to help with that so it's much appreciated airport continues to have substantial projects out there runway and hangar expansion hangar seem to be in constant demand so it seems like as soon as they build a hanger they can rent it out so that continues to go forward runway lighting project just another improvement at the airport updated the dispatch center with regard to cellular 911 emergency phone calls that's something that we really have to do so that's in the five year capital plan to work on that information and case management software at Health and Human Services huge project very important very demanding to implement that that's ongoing now and has been for a while continue to be ongoing and old plank road trail for anyone who's bicycler hiker walker whatever they're gonna widen the original three miles of old plank road trail from eight feet to 12 feet and I have to admit I don't use it so I'm not really you know I'm not really sure where the original three miles is but they're gonna do that I know a lot of people will be appreciative of that and ongoing roof replacement around the county trying to keep our infrastructure up to date so doing a number of things that we fund in our five year capital project plan you mentioned some projects that we've completed that are underway that are planned for the future and viewers may be wondering well how does the board go about establishing priorities when they have these kinds of fiscal constraints yet some of some of the obvious needs like roof replacement as well as some of the perhaps not so obvious but important improvements such as a new technology center how do they go about making those priorities making those decisions well the first thing is through the budget process that we talked about here today that's how the county board really sets priorities of what they feel is important what they need to do for the citizens of Sheboygan County so the budget process is key to developing funding for the different you know what they deem to be important the five year capital plan we just mentioned that that has the airport improvements larger capital projects building new buildings road building things like that the five year plan is reviewed by the finance committee the executive committee and then the full county board so that's how major projects get approved into the overall budget and then the Pepsi process which was extremely interesting I thought very very beneficial to see every program in the county presented to the committee and then ranked by the program committee and then presented to the county board I don't think too many units of government have even done that but Sheboygan County as you know you were involved in that process has 207 now 206 programs one was eliminated but that's a way that the county board the committees yourself Bill can rank different programs and if we have to make really tough funding decisions and we probably are gonna have to that's a way that's a tool for them to use to make those tough decisions and some people may be questioning a little bit what's this Pepsi I don't see them drinking a soft drink here what was the Pepsi process Chairman Gearing took the lead chairing a committee of 10 county board supervisors that as Tim mentioned reviewed and ranked every program and service county wide and before we started the process I don't think any of us sitting here would have said whoa we have 207 programs and services so they went through every program evaluated those programs ranked those programs and though it wasn't a perfect process it's a process that few units of government have gone through and it certainly is another tool a very important tool that county board supervisors the staff can use when they have to make important decisions about funding and what programs and services will continue with so that's been part of our budget process this year and I think will continue to be a tool used in the future the five-year plan talk a little bit more about you know again with the budget and the restraints that we have with Levy some folks might be wondering well how is the five-year capital plan funded how is that different because if you have all these caps in place with ongoing operations well what allows us to be able to build a four or five million dollar science edition or the technology center or make improvements to the airport how are we able to do that yeah good question the five-year plan is funded through borrowing, bonding being a local unit of government we're allowed to issue tax exempt bonds which is a good deal for us because tax exempt bonds we can pay a lower interest to the people who buy our bonds because they can deduct them from their federal income tax so it's a real good position for governments to be in to be able to issue tax exempt bonds so that's how we finance the five-year plan every once in a while we'll put a little bit of tax levy in there but for the last few years we haven't done that too much because interest rates have been so low we can finance projects very cheaply being able to do that so that's how we do those bigger projects in the five-year plan we borrow funds for that but you also leverage some resources through that process as well sure we do we generate grant revenue at the airport as an example we'll get federal dollars that sometimes are 80 to 90% of the cost of a project sometimes there are state dollars in there as well so we do leverage quite a bit of dollars and of course that offsets what we have to borrow and how about the technology center for example you mentioned earlier that we received a nice grant to help bring that together right that grant was 1.7, 1.8 million dollars and without that I'm not sure it would have come together quite honestly because it was a huge donation so it's a good partnership between the county and other businesses in the community back to public input as we wind down this program folks who may have been watching this may be wondering oh geez there's a particular health and human services program that I'm concerned with whether it's funding for developmentally disabled or helping people with chronic mental illness or what have you or maybe they're concerned about law enforcement and how many deputies we have on the road what again would be your advice for how folks can get some information get involved make sure that their concerns are known the first thing would be to try to attend a liaison committee meeting if you're interested in the sheriff's department or law enforcement in general attend a law committee meeting and kind of hear what they're talking about when they develop their budget a lot of those meetings have already taken place so at this point that it would be you could attend a finance committee meeting but the place where you could get it all kind of in one stop shopping as far as the budget would be that public hearing on October 31st that's going to be at the courthouse fifth floor at six o'clock so if anyone's interested in the budget process attend that meeting if you wish to speak you can do so and if you want information ahead of time contact the finance department and we'd be glad to get them that information and is there a general phone number at the finance department that they could put out in case they have questions yeah sure it's 459-3007 459-3007 and also if you're wondering well you're not real comfortable coming to a liaison committee meeting or maybe you don't want to go to finance but you certainly want to express your point of view contact your county board supervisor and don't be surprised if if you're one of those folks out there who don't know who that is sometimes people don't recall but if you don't know and want to express your views contact our county clerk's office and they can give you the name, address, phone number and that's also on our county website so Tim great advice and a nice overview of your department's programs and services very quickly before we end the session here how many staff do you have in the department and what's your feelings about the job your staff's doing? we have 11 staff in our department and a couple years ago it was actually 15 so we've dropped from 15 to 11 we, you know as you know, you and Bill know we made some changes, streamlined somewhat and improved operations and saved some money in the process so now currently we have 11 people the people are great in the finance department the work that they do, you know as you mentioned is very important they're very extremely dedicated to what they do so yeah, I'm very happy with the staff very fortunate to have them good to hear well, we appreciate you being with us today and certainly Tim Finch sharing his overview of the finance department their important roles and responsibilities Tim thanks for joining us my pleasure, thank you next month, Dale Pauls is gonna be here from the healthcare centers as Tim mentioned and we discussed briefly there's been a great deal of discussion about the challenges we faced with owning and operating two facilities Rocky Knoll and Sunny Ridge of course our service continues to be second to none but operationally, financially changes are happening and currently there are in fact some interested parties and perhaps purchasing or leasing Sunny Ridge and that's an ongoing discussion that the county board's having and Dale Pauls will be here next month to give you an update on that so until next month on behalf of chairman Bill Gehrig and the Cheboyton County Board and myself Adam Payne, thank you for joining us