Portage city officials are hoping to save property taxpayers a little money by dipping into the city’s reserves to pay off about $240,000 in debt, rather than borrowing the money.
The Finance and Administration Committee’s look Thursday at the city’s proposed 2018 budget focused extensively on reserves — how much does the city need to keep on hand, and how much it can spend down.
The proposed budget calls for total expenditures of $23.25 million, up from $21.22 million budgeted for this year. The general fund — the largest single fund in the city’s budget — is proposed to be a little more than $7.9 million. The general fund encompasses general government, municipal court, police and fire protection, municipal services, parks and recreation and cable TV.
The rest of the proposed expenditures would be for:
- Debt service;
- Special revenue — a vast category including but not limited to the Portage Public Library, the Business Improvement District, Tax Increment Financing districts, mass transit, the new wheel tax and economic development;
- Capital projects — including vehicle and equipment replacement, work on sidewalks, industrial development and the Portage Canal;
- Enterprise funds — water and wastewater treatment service, paid for mostly by charges to users.
The total tax levy — the amount collected from property taxpayers — is proposed to be $5.57 million, up about 8.8 percent from $5.12 million budgeted for this year.
Finance Director Jean Mohr said the owner of a $100,000 home in Portage would see city property taxes go up by about $35 next year.
But if city officials had opted to borrow about $240,000 to pay for employee post-retirement benefits, roof replacement and upcoming remodeling of some park buildings, the same homeowner would have seen his or her city tax bill go up by about $75.
Instead, that money will come out of the city’s budget reserves, Mohr said.
To comply with a city policy that calls for keeping at least 25 percent of the city’s operating budget in reserves, the city would have to have $2 million in reserves. Mohr said the actual reserve total is closer to $4 million. (Not all of the reserves, she noted, are available for spending.)
City Administrator Shawn Murphy said it’s good for the city to have “healthy” reserves, in the event of an emergency. Bond rating entities also look favorably on municipalities that have adequate or more than adequate reserves, and this can aid the city’s borrowing ability.
“But,” Murphy asked, “do we want to tax for things when we have the money on hand in our reserves?”
Finance and Administration Committee Chairman Dennis Nachreiner said, “My personal opinion is, I believe this shows we are being fiscally responsible” by using reserves instead of borrowing for these expenditures.
Nachreiner also announced some changes in the schedule for finalizing the budget process.
A Finance and Administration Committee meeting that had been scheduled for Monday has been canceled.
The Portage Common Council will meet at 7 p.m. Nov. 21, but the budget hearing and adoption, originally scheduled for that date, has been pushed back to Nov. 28, when the Common Council will meet in special session for the sole purpose of finalizing the budget.
Murphy said the change had to be made to comply with state requirements that notice of the public hearing must be published 15 days in advance. The state requires municipalities to adopt their budget for the coming year before the current year’s end, but Murphy said finalizing the budget in November allows time to get property tax bills out before year’s end.