HomeMy WebLinkAboutVillage of Winneconne (2) •
VILLAGE OF WINNECONNE
Evaluation of Fiscal Conditions and Financial Indicators
Prepared by:
Monica Klaeser and Christine Kaup
Professor Craig S. Maher
May 10, 2003
University of Wisconsin—Oshkosh
Masters of Public Administration
MPA-752 Public Budgeting and Finance
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1
• TABLE OF CONTENTS
INTRODUCTION & LITERATURE REVIEW 3
CONSUMER PRICE INDEX 4
REVENUE INDICATORS 5
5 OWN-SOURCE REVENUES VERSES TOTAL REVENUES 6
INTERGOVERNMENTAL REVENUES 7
REVENUE TOTALS BY CATEGORY TYPE 8
VILLAGE EQUALIZED TAX RATE 9
EXPENDITURE INDICATORS 10
GENERAL FUND EXPENDITURES PER CAPITA 11
EMPLOYEES PER 100 IN POPULATION 12
OPERATING POSITION INDICATORS 14
UTILITY FUND OPERATING RESULTS 15
GENERAL FUND RESERVES 16
• DEBT INDICATORS 17
CURRENT LIABILITIES PER CAPITA 18
LONG-TERM DEBT AS PERCENTAGE OF EQUALIZED VALUE 19
LONG-TERM DEBT PER CAPITA 20
PENSION LIABILITIES 21
COMMUNITY NEEDS 22
VILLAGE POPULATION AND TRENDS 23
PROPERTY VALUES AND TRENDS 24
MEDIAN INCOMES AND TRENDS 26
POVERTY STATUS OF POPULATION 27
SUMMARY AND CONCLUSIONS 28
Revenue Analysis Results 28
Expenditure Analysis Results 28
Operating Position Results 29
Debt Analysis Results 29
Community Needs Analysis Results 29
RESOURCES 30
ACKNOWLEDGEMENTS 31
•
2
• INTRODUCTION & LITERATURE REVIEW
The Village of Winneconne, Wisconsin, identified the need for additional verification of
the Village's sound financial condition. The need was formalized in a written request by the
former Village Administrator Eric Johnson and addressed to Dr. Craig Maher, University of
Wisconsin—Oshkosh, Masters of Public Administration Program. As graduate students in the
Masters of Public Administration Program, Public Budget & Finance class, we volunteered to
satisfy the need of the Village by conducting an analysis.
It was Mr. Johnson's opinion that"the Village is in `very sound' fiscal or financial
condition, but needs additional verification." The verification requested by the Village was a 10- Vi
year analysis (1991 to 2001) of financial indicators using the Financial Trend Monitoring System,
which is a system published by the International City/County Management Association in bYi
Evaluating Financial Condition:A Handbook for Local Government. This system of analysis is 013
used annually by the City of Clearwater, Florida, to evaluate its' financial condition; a copy of
which was obtained by Mr. Johnson.
The ICMA presents 12 primary factors that impact the financial condition of a
government unit. The 12 factors include:
1. Revenues 7. Policies/Management Practices
2. Expenditures 8. Community Needs&Resources
3. Operating Position 9. External Economic Conditions
4. Debt Structure 10. Intergovernmental Constraints
• 5. Contingent Liabilities 11. Natural Disasters&Emergencies
6. Condition of Capital Plant 12. Political Culture
While all of these factors are closely related and are important to understand since each
can affect the Village's financial condition, only five factors are incorporated into this report for
Winneconne based on Mr. Johnson's request and due to the limited amount of time available for
the analysis. The five factors include revenues, expenditures, operating position, debt structure
and community needs and resources. Each factor includes two to four"indicators" or
calculations of data to quantify and analyze the factor while providing trend information. Two
indicators originally requested by Mr. Johnson(fixed cost expenditures for the expenditure factor
and median age and trends in the community needs and resources factor) are not included in the
report due to a lack of information. Missing data or gaps in available data also required limiting
some of the analysis to less than a 10-year period. Even with the abbreviated time period for
some indicators, the Village's financial trend for the indicator(s) was still identified using the
data that was available.
The format of the report includes a separate section for each of the five financial factors.
Each factor is introduced with a summary and then each indicator related to the factor is
presented and analyzed. Each indicator includes Winneconne's trend, a warning trend describing
what condition to be concerned about,the formula used to compute the indicator, a graph and
table presenting the data, a background description of the indicator and its significance, along
with an analysis of Winneconne's result. This report is designed using the ICMA guidelines to
provide an overview of the financial and demographic trends of the Village of Winneconne. In
addition to addressing the need identified by Mr. Johnson, this report can be used by the Village
• elected officials, staff, and/or financial advisors for a broad and objective view of the Village's
overall financial condition.
3
• CONSUMER PRICE INDEX
The Wisconsin Department of Workforce Development publishes the Wisconsin
Consumer Price Index (CPI), a statistical measure of changes in the prices of goods and services
bought by urban consumers. The CPI is a measure of inflation. Among the items included in the
CPI are food, housing, clothing, transportation, health and recreation. Many of the financial
indicators in this document are adjusted using the CPI as a means of standardizing dollar
amounts over different years. This calculation removes the inflationary factor so that the true
growth or decline of revenues and expenditures may be determined.
The Wisconsin Department of Workforce Development's CPI uses the base years of
1982-1984 to measure inflation. This index has been modified to use 1990 as the base year,
which coincides with the 10-year trend period for this report. The following graph and table
displays the 1982-1984 base CPI and the CPI as adjusted to 1990 as the base year. The term for
real dollar information that has been adjusted for inflation using the CPI is "constant dollar," and
it is used throughout the document.
Wisconsin Consumer Price Index 1990 to 2002
Not Seasonally Adjusted
• 180.0 1 1718 172.9
170.0 -- 167s
157.6
159 6 �
2'
160.0 153.E-
150.6
150.0 146.0
140.5
135.9 138.66 139.55
140.0 -. 135.27
131.0 13132
127.20 128.81
130.0 - 3:9- - 124.05 -
12155 _ - -
117.84
120.0 -11343--
109.69
110.0 - 105.73
130.0
FY90 FY9I FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02
•■■■■■CPI with 1982-1984 as base 4-10■•■CPI with 1990 as base
Source: Wisconsin Department of Workforce Development,Labor Market Indicators.
Consumer Price Index(CPI) FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02
1982-1984 base 123.90 131.00 135.90 140.50 146.00 150.60 153.70 157.60 159.60 162.70 167.60 171.80 172.90
1990 base 100.00 105.73 109.69 113.40 117.84 121.55 124.05 127.20 128.81 131.32 135.27 138.66 139.55
•
4
• REVENUE INDICATORS
Revenues determine the capacity of the local government to provide services for its
residents. There are a number of factors, which can impact a government unit's revenues,
including but not limited to, economic conditions, demographic composition, administration, and
population growth. Of particular concern in the State of Wisconsin recently is the fiscal crisis
that accounts for an estimated $3.2 billion budget deficit. This crisis has and will continue to
impact the local government units throughout the State.
As prescribed by the ICMA, important issues to consider in revenue analysis are growth,
flexibility, elasticity, dependability, diversity and administration. Under ideal conditions,
revenues should be growing at a rate equal to or faster than the combined effects of expenditures
and inflation. Revenues should be sufficiently flexible to allow adjustments to changing
conditions, and have a balance between the revenues that grow at the rate of inflation and
revenues that are constant over time. Revenue sources should also be diversified so that a
government unit is not overly dependent on one funding source. (Groves & Valente, 1994, 21).
The indicators included in the following Revenue Factor analysis are:
1. Own-Source Revenues versus Total Revenues
2. Intergovernmental Revenues
3. Revenue Totals by Category Type
• 4. Village Equalized Tax Rates—Analyzed with Comparable Communities
Village of Winneconne Results
This analysis reviewed the four above-mentioned revenue indicators. The results were
positive overall, while there were a few fluctuations in the composition of Winneconne's
revenues and the growth in revenues when adjusted for inflation. There was an increasing
reliance by the Village on own-source revenues. Since the fiscal condition of the State of
Wisconsin and associated intergovernmental aids is in question at this time, an increasing
percentage of own-source revenues will likely be necessary to provide public goods and services.
Winneconne's revenue composition from 1900 to 2001 included growth in total taxes and public
charges for services in constant dollars. It is important to note that in constant dollars the Villa e
has not increased its collection of revenues for licenses,permits, fines and penalties or g
intergovernmental charges for services during the period of analysis. These two areas appear to
not have kept up with inflation and should be reviewed by the Village.
Winneconne's equalized tax rate has remained relatively stable over the four-year period
of analysis without significant rate adjustments. This indicates that the total Village tax levy has
remained consistent with the equalized value changes. In comparison with other communities,
Winneconne's equalized tax rate is consistent from 1998 to 2001.
•
5
OWN-SOURCE REVENUES VERSES TOTAL REVENUES
REVENUE INDICATOR 1
Winneconne's Trend: Own Source Revenues as a percentage of Total Revenues
Positive (Constant Dollars)
100.00% . ,
Warning Trend: 9o.00°r° _
Decreasing own-source 80.00%
revenues as a percentage of 70.00%
total revenues. 60.00%
50.00% --
40.00% -
Formula: 30.00%
1. Own Source Revenues/CPI 20.00%
10.00%
2. Total Revenues/CPI 0.00°r° --
FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
3. Own Source Revenues Own Source Revenues as a Percentage of Total Revenues(constant dollars)
(constant)/Total Revenues —Linear(Own Source Revenues as a Percentage of Total Revenues(constant dollars))
(constant)
Source:Graphing Revenues,Expenditures,and Taxes(G.R.E.A T.Program),University of
Wisconsin—Extension.
Fiscal Year FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Own Source Revenues 600,600 918,900 762,900 1,462,600 1,249,900 1,302,200 1,128,300 1,204,800 1,872,500 2,638,134 1,797,236 2,367,517
Revenues 875,500 1,316,500 1,138,500 1,842,700 1,637,600 1,729,200 1,755,400 1,645,700 2,375,400 3,054,633 2,303,131 3,152,047
er Price Index(1990=100) 100.00 105.73 109.69 113.40 117.84 121.55 124.05 127.20 128.81 131.32 135.27 138.66
Own Source Revenues(constant dollars) 600,600 869,101 695,506 1,289,771 1,060,875 1,071,329 909,653 947,170 1,453,691 2,008,936 1,328,629 1,707,426
Total Revenues(constant dollars) 875,500 1,245,153 1,037,925 1,624,956 1,389,681 1,422,624 1,416,075 1,293,789 1,844,111 2,326,099 1,702,618 2,273,220
Own Source Revenues as a Percentage of Total Revenues
(constant dollars) 68.60% 69.80% 67.01% 79.37% 76.33% 76.31% 64.28% 73.21% 78.83% 86.37% 78.03% 76.11%
Background
Examining own-source revenues as a percentage of total revenues presents the dependence of the
government unit on outside revenue sources. As the percentage of own-source revenues
increases or declines over time, it provides an indication of the flexibility and/or dependence of
the government unit on other entities to cover the revenues necessary for providing goods and
services.
Analysis
This indicator looks at Winneconne's own-source revenues, including: general property taxes,
tax increments,payments in lieu of taxes, special assessments, licenses and permits, fines,
forfeitures, penalties,public charges for services, intergovernmental charges for services, other
financing sources, and miscellaneous revenues. The percentage varied over the 10-year period
from a low of 64.28% in 1996 to 86.37% in 1999 using constant dollars. Overall,the increasing
linear trend indicates an increasing reliance by the Village on own-source revenues. Since the
fiscal condition of the State of Wisconsin, and therefore the associated intergovernmental aids, is
in question at this time and that an increasing percentage of own source revenues will likely be
necessary to provide goods and services, the Village's trend is positive.
•
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•
• INTERGOVERNMENTAL REVENUES
REVENUE INDICATOR 2
Intergovernmental Revenues as a Percentage
Winneconne's Trend: of Total General Revenues
Positive (Constant dollars)
45.00%-
Warning Trend: 40.00%---
---- - - --- --
Increasing amount of 35.00°/°-- --� —-_
intergovernmental revenues 30.00°r°
as a percentage of total 25.00°i —
general operating revenues 20.00°r
15.00% — — — — — —
Formula:
10.00°r°
Intergovernmental
5.00%
Revenues/General , ,, , ,; ,— _a a , ,
Revenues 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
ll♦Intergovernmental Revenues as a percentage of General Revenues
—Linear(Intergovernmental Revenues as a percentage of General Revenues)
Source:Graphing Revenues,Expenditures,and Taxes(G.R.E.A T.Program),University of
Wisconsin–Extension.
Fiscal Year FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Intergovernmental Revenues 361,200 397,300 375,300 379,700 387,400 426,500 626,700 440,500 502,500 416,499 505,895 784,530
General Revenues 875,500 1,066,500 1,138,500 1,429,200_ 1,432,500 1,590,600 1,755,400 1,576,700 1,833,400 1,735,283 2,303,131 2,202,047
Consumer Price Index(1990=100) 100 105.73 109.69 113.4 117.84 121.55 124.05 127.2 128.81 131.32 135.27 138.66
• Intergovernmental Revenues(Constant Dollars) 361,200 375,768 342,146 334.832 328,751 350,884 505,200 346,305 390,109 317,163 373,989 565,794
General Revenues(Constant Dollars) 875,500 1,008,701 1,037,925 1,260,317 1,215,631 1,308,697 1,416,075 1,239,544 1,423,337 1,321,416 1,702,618 1,588,091
Intergovernmental Renvenues as a percentage of
General Revenues 41.26% 37.25%, 32.96% 26.67% 27.04% 26.81% 35.70% 27.94% 27.41% 24.00% 21.97% 35.63%
Background
Intergovernmental revenues (revenues received from another governmental source) can be
dangerous to a government entity's financial condition if the government relies too heavily on
such sources. In recent years, especially today in Wisconsin, federal and state governments have
reduced or withdrawn funding to local government units as method of filling its budget shortfalls.
While most all government units have been impacted from intergovernmental cutbacks, local
government units with an especially large reliance on intergovernmental revenues are
appreciably vulnerable. Review and analysis of intergovernmental revenues educates a local
government unit on its reliance on outside revenues and whether it is particularly vulnerable if
additional revenues are cutback.
Analysis
The Village of Winneconne's percentage of intergovernmental revenues in relation to total
general revenues had a declining trend over the 10-year period despite an increase in 2001. The
relatively high percentage of intergovernmental revenues in both 1996 and 2001 is attributed to
"other local government aids" as defined by the G.R.E.A.T. program as highway or bridge aids
and other grants for public services such as libraries, parks, solid waste management or veterans
graves. Overall the Village has reduced its use of intergovernmental revenues or aids as a
percentage of overall general fund revenues. That State Shared Revenues portion of
• intergovernmental aids has declined in constant dollars since 1999 and unadjusted dollars since
1996.
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, ,
III REVENUE TOTALS BY CATEGORY TYPE
REVENUE INDICATOR 3
Winneconne's Trend: Revenue Totals by Category
Positive,yet some (constant dollars)
inconsistencies in revenue
streams $750,000 - - -
$700,000
$650,000 s
Warning Trend: $600,000 _ rt
Shifting burden in the $550,000 - i
$500,000 - -
revenue structure overtime $450,000 i
or dramatic change in the $400,000
$350,000 n
composition of the $300,000 1
revenue structure. $250,000 1
$200,000
$150,000 t
Formula: $100,000
i_ , __Adjustment of each $50,000 I j I ,I, .,
revenue category to be FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
reviewed as constant
dollars. ■TOTAL TAXES •SPECIAL ASSESSMENTS
o INTERGOVERNMENTAL REVENUES O LICENSES,PERMITS,FINES,PENALTIES
•PUBLIC CHARGES&MISC.REVENUES •INTERGOVB'i W1TAL CHARGE FOR SERVICES
Source:Graphing Revenues,Expenditures,and Taxes(G.R.E.A T.Program),University of
Wisconsin-Extension.
venue Totals By Category(constant dollars) FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Total Taxes 463,600 473,659 510,439 549,471 563,221 559,687 568,964 578,616 614,937 642,128 706,775 696,376
Intergovernmental Revenues 361,200 375,768 342,146 334,832 328,751 350,884 505,200 346,305 390,109 317,163 373,989 565,794
Special Assessments 22,800 14,849 9,937 69,489 116,938 107,939 111,890 96,462 48,754 37,287 49,389 34,311
Licenses,Permits,Fines,Penalities 25,300 30,550 28,535 28,307 33,350 36,035 34,905 40,959 32,529 36,185 37,596 31,755
Public Charges and Miscellaneous Revenues 77,900 97,701 131,279 263,052 155,635 239,190 185,490 168,553 331,418 288,652 533,809 259,855
Intergovernmental Charges for Service 11,000 15,890 15,316 14,903 17,481 14,562 8,303 8,333 5,279 0 1,059 0
Background
A government units understanding of it revenue structure or composition is critical to
understanding the government's ability to secure the necessary revenues to cover the costs for
goods and services. If the revenue structure has changed substantially over time or if different
revenues streams are not keeping pace with other revenues sources, this should be reviewed by
the government to verify its financial position in securing appropriate revenues. A local
government unit should consider a goal to maintain a diversified and stable revenue stream to
protect it from unforeseen events or changes to revenue structures.
Analysis
Winneconne's revenue composition includes growth in total taxes and public charges for
services in constant dollars from 1990 to 2001, while intergovernmental revenues have
fluctuated slightly yet remaining stable overall. It is important to note that in constant dollars the
Village has not increased its collection of revenues for licenses, permits, fines or penalties, or
intergovernmental charges for services during the period of analysis. These two areas appear to
not have kept up with inflation and should be reviewed by the Village.
•
8
• VILLAGE EQUALIZED TAX RATE
REVENUE INDICATOR 4
Winneconne's Trend:
Stable Equalized Tax Rate Comparison
Warning Trend:
A substantially higher $10 00
equalized tax rate in $8.00
comparison to neighboring _
c
I
ommunities. Significant $6 00
annual changes in the $4 00
equalized tax rate indicate
inconsistent levy $0.00 .-u� �- ��
adjustments in relation to
the change in equalized FY98 FY99 FY00 FY01
value.
i Winneconne ®Berlin i i North Fond du Lac
Formula:
Reported equalized tax i Omro NM Sherwood —Linear(Winneconne)
rates from area Source: Winneconne,Berlin, Omro, Sherwood, and North Fond du Lac
communities
Fiscal Year FY98 FY99 FY00 FY01
Winneconne $7.43 $8.33 $7.57 $7.69
• Berlin $7.44 $7.59 $7.72 $7.91
North Fond du Lac $6.74 $6.62 $6.62 $7.02
Omro $8.45 $8.12 $9.51 $9.26
Sherwood $6.27 $6.22 $6.04 $6.67
Background
In Guide for Property Owners, The Wisconsin Department of Revenue defines equalized value
as"the estimated value of all taxable real and personal property in each taxation district, by class
of property, as of January 1, and certified by the Department of Revenue on August 15 of each
year" (2002, 1). With the exception of agricultural property (that bases its value on the ability to
generate income), market value or the most probable selling price is represented by this value
(2002, 1). The Department of Revenue defines tax rate as, "the ratio of levy to the base" (2002,
1). The equalized tax rate is calculated by "dividing the amount of the tax levy by the total
equalized value of the tax district" and is generally expressed as dollars per hundred or dollars
per thousand (2002, 1). These funds are raised by the municipality to operate and provide local
services to residents (2002, 12). The state determines the equalized values by studying and
comparing local sales over the past year in addition to new construction and value changes, such
as through annexation.
Analysis
Winneconne's equalized tax rate has remained relatively stable over the four-year period of
analysis without significant rate adjustments, which indicates that the total Village tax levy has
• remained consistent with the equalized value changes. In comparison with other communities,
Winneconne's equalized tax rate is consistent from 1998 to 2001.
9
• EXPENDITURE INDICATORS
The expenditures of a local government unit can be considered a gauge of the
government's level of service or goods provided to the community. As the amount, or number of,
good and services provided by a government unit increases, so too will its expenditures. The
level of goods and services provided by a government unit does not necessarily reflect the
efficiency or effectiveness of the service.
Understanding the expenditures of a government unit is important to understanding if it is
performing within its means. If expenditures are not consistent with revenues, that should be
understood and examined by elected officials and the administration. (Groves &Valente, 1994,
51).
The indicators included in the following Expenditure Factor analysis are:
1. General Fund Expenditures Per Capita
2. Employees per 100 Population—Analyzed with Comparable Communities
Village of Winneconne Results
The analysis of the general fund expenditures per capita and employees per 100
•
population to understand the Village's expenditure position revealed mixed results. The per
capita general fund expenditures (excluding capital costs) have risen over$100 from 1994 to
2001 even when adjusting for inflation. This would indicate an increasing burden on the
taxpayers of Winneconne and should be monitored in the future. The trend also raises questions
about the cause of the increase despite the adjustment for inflation and an increasing population.
Has the Village seen additional demand for services with a rising number of households despite
only a slight population increase? Are there additional programs or services that the Village has
added, or grant funding that previously covered costs for services expired?Are there additional
mandated services being provide by Winneconne? The trend is not cause for alarm but deserves
additional investigation by Village elected officials and the administration.
In contrast, the Village's employment per 100 residents from 1994 to 2001 has remained
stable with an average of less than one employee per 100 population. The comparison with other
communities presented that Winneconne's full-time employment indicator results are similar to
those reflected in the data from the comparable communities of Berlin,North Fond du Lac, and
Omro while slightly higher than Hortonville and Sherwood.
•
10
• GENERAL FUND EXPENDITURES PER CAPITA
EXPENDITURE INDICATOR 1
Winneconne's Trend: General Fund Expenditures Per Capita
(constant dollars)
Negative
Warnln Trend: $450 8414
$430 $433 $393— $403
$500 $453
g $400
Increasing net operating $34s
expenditures per capita $350
$300
$250
$200
Formula:
Net operating $100
expenditures(constant $50 — —
dollars)/population so-
FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
...I—GENERAL FUND EXPENDRURES PER CARTA—Linear(GENERAL FUND EXPENDITURES PER CARTA)
Source:Graphing Revenues,Expenditures,and Taxes(G.R.E.A T.Program),University
of Wisconsin—Extension. Village of Winneconne Annual Financial Reports 1994,1995,
1997—2001.
Fiscal Year FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
General Fund Operating Expenditures Total 890,149 868,973 1,147,951 1,262,563 1,295,312 1,198,899 1,270,461 1,519,844
Consumer Price Index(CPI) 117.84 121.55 124.05 127.20 128.81 131.32 135.27 138.66
eral Fund Operating Expenditures(constant dollars) 755,388 714,910 925,394 992,581 1,005,599 912,960 939,204 1,096,094
ulation 2164 2196 2235 2308 2322 2326 2330 2419
General Fund Expenditures Per Capita $349 $326 $414 $430 $433 $393 $403 $453
Background
Changes in per capita expenditures illustrate changes in expenditure relative to population
change. An increasing per capita trend can indicate that the costs of providing services are
outpacing the communities' ability to pay. Increasing per capita cost may also reflect a
increasing number of households despite only a slight increase in total population, which would
increase the overall cost of providing services. A rise in the per capita expenditures in constant
dollars may also illustrate declining productivity or a need to spend additional funds to provide
the same level of services.
Analysis
Winneconne's trend for per capita expenditures is marginal. With an increase over the eight-
year period of approximately $100 per capita, it does raise questions about the cause of the
increase despite the adjustment for inflation. Has the Village seen additional demand for
services with a rising number of households despite only a slight population increase? Are there
additional programs or services that the Village has added, or grant funding that previously
covered costs for services but has expired (such as a grant for additional police officers)? Are
there additional mandated services being provide by Winneconne? The trend is not negative and
cause for alarm but deserves additional investigation by Village elected officials and the
administration.
•
11
410 EMPLOYEES PER 100 IN POPULATION
EXPENDITURE INDICATOR 2
Winneconne's Trend: Municipal Employees per 100 of Population
Positive
Warning Trend:
Increasing number of 0 8
General Fund municipal —
0 6
employees per 100
population 0 4
0.2
Formula: o .
Number of General Fund FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
municipal employees
Population/100 ■Winneconne
Source: Winneconne,Village Clerk
Fiscal Year FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Winneconne: Full-time Employees 15 14 18 23 22 21 20 21
Current Population 2067 2114 2149 2164 2196 2235 2308 2322 2326 2330 2419
Employees per 100 population 0 0 0 0.69 0.64 0.81 1.00 0.95 0.90 0.86 0.87
Background
Personnel costs are a major expenditure for local governments. By graphically plotting
employees per capita—changes in expenditures can be measured(Groves &Valente, 1986, 52).
Increasing employees per capita may"indicate expenditures rising faster than revenues" and
there may be"a decrease in employee productivity" or the Village is becoming more labor
intensive (1986, 52).
Analysis
Over the past eight years, the number of the Village's full-time general fund employees per 100
of population has remained at approximately one or less employee per 100 residents. Despite a
gradual increase in population, the number of full-time workers has remained fairly stable at
around 20 in total.
As requested by the former Village Administrator, full-time general fund employment data was
collected from Berlin, Hortonville,North Fond du Lac, Omro, and Sherwood. Using the above
formula, along with the population data from UW-Extension's G.R.E.A.T. June 2002 database—
the following comparison graph was developed. Winneconne's full-time employment indicator
results are similar to those reflected in the data from these comparable communities.
•
12
•
• Fiscal Year FY91 FY92 FY93 FY94 FY95_FY96_FY97 FY98 FY99 FY00 FY01
11111111 ,
Winneconne: Full-time Employees 15 14 18 23 22 21 20 21
Current Population 2067 2114 2149 2164 2196 2235 2308 2322 2326 2330 2419
Employees per 100 population 0 0 0 0.69 0.64 0.81 1.00 0.95 0.90 0.86 0.87
Berlin: Full-time Employees 41 41 41 41 41 41 41 41 41 41 41
Current Population 5359 5377 5398 5403 5374 5395 5440 5520 5510 5527 5314
Employees per 100 population 0.77 0.76 0.76 0.76 0.76 0.76 0.75 0.7• 0.74 0.74 0.77
Hortonville: Full-time Employees 10 11 11 11 11 11 11 11 12 12 13
Current Population 2042 2083 2122 2126 2157 2197 2282 2384 2428 2455 2396
Employees per 100 population 0.49 0.53 0.52 0.52 0.51 0.50 0.48 0.46 0.49 0.49 0.54
North Fond du Lac: Full-time Employees 30 29 32 32 34 35
Current Population 4308 4321 4404 4412 4484 4511 4579 4626 4637 4660 4575
Employees per 100 population 0 0 0 0 0 0.67 0.63 0.69 0.69 0.73 0.77
Omro: Full-time Employees 19 19 19 20 19 19 19 19 19 19 19
Current Population 2843 2849 2909 2927 3007 3086 3147 3158 3105 3172 3171
Employees per 100 population 0.67 0.67 0.65 0.68 0.63 0.62 0.60 0.60 0.61 0.60 0.60
Sherwood: Full-time Employees 3 3 3 4 4 4 4 4 7 7
Current Population 848 862 900 968 1008 1049 1118 1209 1286 1398 1630
Employees per 100 population 0.35 0.35 0.33 0.41 0.40 0.38 0.36 0.33 0.31 0.50 0.43 1.2
Municipal Employees per 100 of Population
Comparable Communities
__1
0.8
0.4 r
le IF II
-
0.2 Li i IL , 1
FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
s Winneconne ■Berlin ❑Hortonville o North Fond Du Lac •Omro
Source: Winneconne, Berlin,Hortonville,North Fond du Lac,and Omro
i
13
• OPERATING POSITION INDICATORS
Local government's ability to balance its budget regularly, maintain adequate reserves for
unexpected events, and have sufficient liquidity to pay its creditors on time—all refers to
operating position (Groves & Valente, 1986, 61).
Surpluses or deficits are generated by the government's operating funds during a fiscal
year(1986, 61). An operating surplus occurs "when current revenues exceed current
expenditures," and an operating deficit results "when the current expenditures exceed the current
revenues" (1986, 61). Managerial decisions, unpredicted expenditures or revenue shortfalls may
unintentionally create a surplus or a deficit(1986, 61).
Determining a local government's current operating position, can aid in identifying:
• A pattern of operating deficits;
• A decrease in reserves;
• A decline in liquidity;
• Ineffective revenue projection techniques;
• Ineffective budgetary controls
(1986, 62)
The indicators included in the following Operating Position analysis are:
1. Utility Fund Operating Results
• 2. General Fund Reserves
Village of Winneconne Results
The utility operating funds and the undesignated general fund reserves as a percentage of
the general fund operating expenditures from 1994 to 2001 were obtained, studied and compared.
The utility operating fund consists of the water and sewer enterprise fund's net income and has
shown a surplus in each of the eight years of available information—despite a major expenditure
on well improvements in 1999 and 2000 (Jensen, 2003).
The undesignated general fund balance to general fund operating expenditures from 1994
to 2001 has also fluctuated slightly, but has remained rather stable and reflects a positive ratio
and financial wellness. By maintaining a stable level of reserves on an annual basis, the Village
maintains its ability to respond to an unforeseen need or crisis. However,the Village should
review its reserve policy in relationship to its insurance coverage and overall financial health to
establish a consistent level of reserve that will be dedicated to addressing nonrecurring
unanticipated expenditures or emergency needs if such a policy isn't already in place.
•
14
• UTILITY FUND OPERATING RESULTS
OPERATING POSITION INDICATOR 1
Winneconne's Trend: Water and Sewer Operating Results
Positive (as of December 31 each year)
Warning Trend: $300,000.00 — ,
Recurring enterprise $250,000.00
losses(constant dollars)
$200,000.00
$150,000.00
Formula:
$100,000.00 •
Water and Sewer Income $50,000.00 is ® i
or Losses in constant $-
dollars FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Operating income(loss) Constant 1990 dollars
—Linear(Constant 1990 dollars)
Source:Village of Winneconne Annual Financial Reports 1994,1995,1997—2001.
Fiscal Year: FY94 FY95 FY96 FY97 FY98 FY99 _ FY00 FY01
Operating income(loss) $132,530.00 155,416.00_ 146,272.00 109,111.00 135,266.00 86,259.00 30,824.00 267,261.00
Consumer price index(CPI) 117.84 121.55_ 124.05 127.20 128.81 131.32 135.27 138.66
Constant 1990 dollars $112,466.06 127,861.79 117,913.74 85,779.09 105,012.03 65,686.11 22,787.02 192,745.56
•
Background
The operations of utility or enterprise funds are highly visible and are expected to be managed
similar to that of profit-earning businesses (Groves & Valente, 1986, 109). Enterprise revenues
differ from other Village revenues because "they are governed by the rules of supply and
demand" (City of Clearwater, 2001, 23). If user fees are increased by the Village, the revenues
from these services may decrease as customers become more conservative and demand
diminishes (2001, 23).
From the Village's Annual Financial reports, 1994 to 2001,the total net income (or loss) from
the Sewer and Water Utilities were combined for the operating income (loss) amounts shown in
the above table and graph.
Analysis
A positive Water and Sewer Utility fund operating trend is the result of this study. Enough
revenue was produced to cover expenditures during each of the eight years of supplied data.
This enterprise fund appears to be healthy overall. The clerk mentioned that major well work
was completed in 2000 on one of the Village's wells—reflected in the lower total amounts in
1999 and 2000.
, ill
15
• •
Winneconne's Trend:
Stable
Warning Trend:
GENERAL FUND RESERVES
OPERATING POSITION INDICATOR 2
Fiscal Year
Undesignated General Fund Reserves
(as of December 31 each year)
70.00%
Declining undesignated
fund balance as a
60.00%
50.00%
percentage of net 40.00%
operating revenues
Formula:
30.00%
20.00%
10.00%
Undesignated general fund 0.00% —
reserves/general fund FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
operating expenditures -- _ _
ENE Undesignated general fund reserves as a percentage of general fund operating expenditures
—Linear(Undesignated general fund reserves as a percentage of general fund operating
expenditures)
Undesignated general fund reserves as a percentage of
Source:Village of Winneconne Annual Financial Reports 1994,1995,1997—2001.
FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
General fund operating expenditures total 890,149 868,973 1,147,951 1,262,563 1,295,312 1,198,899 1,270,461 1,519,844
Undesignated general fund reserves 273,207 428,310 690,406 521,651 577,799 449,119 565,272 717,359
general fund operating expenditures 30.69% 49.29% 60.14% 41.32% 44.61% 37.46% 44.49% 47.20%
Background
A positive fund balance is often considered a financial reserve available for emergencies or other
operations. While the fund balance is not necessarily available for appropriation, it does affect
the government unit's ability to survive a crisis or unforeseen circumstances. Regardless of the
government unit's intend use for the fund balance or reserve, a decrease could indicate that the
government will be unable to meet a future obligation or community need (Groves &Valante,
1986, 73).
Analysis
Winneconne's undesignated General Fund Reserve, as a percentage of the Village's general fund
operating expenditures, has remained fairly stable from 1994 to 2001. By maintaining a stable
level of reserves on an annual basis,the Village maintains its ability to respond to an unforeseen
need or crisis. However, the Village should review its reserve policy in relationship to its
insurance coverage and overall financial health to establish a consistent level of reserve that will
be dedicated to addressing nonrecurring unanticipated expenditures or emergency needs.
•
16
• DEBT INDICATORS
Debt is an explicit obligation that is important to analyze because it is an effective way to
finance capital improvements or to cover temporary cash shortfalls caused by uneven revenue
flows and must be used wisely and conservatively (Groves &Valente, 1986, 75). A
government's credit rating can be damaged and the cost of future borrowing can increase if debt
is not repaid on time (1986, 75).
General obligation, special assessment and revenue bonds are the most common forms of
debt(1986, 75). Local government must make certain that the present revenue bases will be
adequate and capable of meeting future obligations that come due when these forms of debt are
used to finance capital projects (1986, 75).
Under ideal conditions, a local government's debt should be"proportional in size and rate
of growth to its tax base,"not exceed the useful life of the assets it is financing, not be used for
normal everyday operations, and not create such a heavy burden on current revenues that
operating expenditures will suffer(1986, 75).
An analysis of a municipality's debt structure may reveal:
• Inadequate cash management or expenditure controls;
• Increasing reliance on long-term debt;
• Decreasing expenditure flexibility as fixed payments for principal and interest on
long-term debt increase;
• Use of short-term debt to finance current obligations;
• Sudden and large changes in future debt service
(1986, 75, 76).
The indicators included in the following Debt analysis are:
1. Current Liabilities Per Capita
2. Long-Term Debt as a Percentage of Equalized Value
3. Long-Term Debt Per Capita
4. Pension Liabilities
Village of Winneconne Results
The Village of Winneconne's debt structure is positive. The Village's trends are within
industry benchmarks and indicate that there is no reason for concern in this area. The
composition of the accounts payable portion of the current liabilities requires additional
clarification,therefore the Village should consult with its financial advisor for a more complete
analysis of the trend. The pension liabilities as a percentage of equalized value declined from
1993 to 2001 indicating a positive trend. However, Winneconne's liability to the Wisconsin
Retirement System(WRS) from 1990 was amortized over a 40-year term at 8% interest per year
on the unpaid balance. While these terms may have been favorable in 1990, given the interest
rate climate today the Village should consult with its financial advisor the potential for
refinancing the WRS liability.
17
• CURRENT LIABILITIES PER CAPITA
DEBT INDICATOR 1
Winneconne's Trend: Current Liabilities per Capita
Positive,but somewhat (constant dollars)
inconsistent
$20.00
—
Warning Trend: $15.00
Increasing Current —
Liabilities per capita may $10.00
mean inadequate cash $5.00
management
LL
Formula: FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Current Liabilities
Current Population f-1 Current liabilities per capita(constant dollars)
Linear(Current liabilities per capita(constant dollars))
Source:Village of Winneconne Annual Financial Reports 1994, 1995,1997—2001.
Note:Data for 1996 was unavailable
Fiscal Year FY94 FY96 FY96 FY97 FY98 FY99 FY00 FY01
Current liabilities $ 29,000 30,482.00 33,036.00 21,404.00 39,472.00 24,330.00 51,292.00
Current population 2164 2196_ 2235 2308 2322 2322 2330 2419
Consumer price index 117.84 121.55 124.05 127.20 128.81 131.32 135.27 138.66
Current liabilities per capita
• (constant dollars) $ 11.37 11.42 0.00 11.25, 7.16 12.94 7.72 15.29
Background
The sum of all liabilities due at the end of the year define current liabilities, and may include
short-term debt, the current portion of long-term debt, all accounts payable, accrued liabilities
and other current liabilities (Groves &Valente, 1986, 77). Accounts payable was chosen
because it consistently appeared in the Village of Winneconne's Combined Balance Sheet, for
the required years, with the exception of the missing year of 1996.
Analysis
Further explanation is needed from the Village's financial advisor that includes an analysis of the
makeup of accounts payable under the liability heading on Winneconne's Balance Sheet—to
provide a more complete explanation of the Village's trend of current liabilities per capita.
•
18
. LONG-TERM DEBT AS PERCENTAGE OF EQUALIZED VALUE
DEBT INDICATOR 2
f _
Long-term Debt as a Percentage of Equalized Value
Winneconne's Trend: (constant dollars)
Positive 3.0%
2.5% j
Warning Trend: 2 0% — —
Increased long-term general
debt as a percentage of 1.5% —
assessed valuation 1.0%
0.5%
[1_Formula: 0.0% —
Total obligation debt/ FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Equalized valuation
laza Gross general obligation debt as a percentage of equalized valuation
-Linear(Gross general obligation debt as a percentage of equalized valuation)
Source: Graphing Revenues, Expenditures,and Taxes(G.R.E.A T.Program),
University of Wisconsin—Extension.
Fiscal Year FY91 FY92 FY93 FY94 FY95 FY98 FY97 FY98 FY99 FY00 FY01
Total general obligation debt $1,368,600 1,217,900 1,732,100 1,663,100 1,452,800 1,166,200 684,100 1,044,600 2,733,048 2,290,341 2,914,113
Equalized value 57,494,000 64,163,400 73,213,600 74,982,200 81,380,200 92,961,900 96,343,500 105,219,500 108,474,200 119,153,700 129,963,700
Gross general obligation debt as a
percentage of equalized valuation 2.4% 1.9% 2.4% 2.2% 1.8% 1.3% 0.7% 1.0% 2.5% 1.9% 2.2%
Background
Total general obligation debt includes bonds, notes, state trust fund loans, land contracts,
installment purchases, and other items,that mature more than one year after the date of issue
(G.R.E.A.T., 2002, IV). It is debt that is secured by an irrepealable tax levy and is subject to the
statutory 5%of equalized valuation limitation(2002, IV). Equalized Value (assessed full value)
is the entire value all taxable general property as determined annually by the Wisconsin
Department of Revenue to reflect actual market value. The Village's "ability to repay may be
decreasing if it" is depending"on the property tax to repay its debts" resulting in"an increase in
net direct bonded long-term debt as a percentage of assessed valuation" (Clearwater, 2001, 32).
Analysis
Gross general obligation debt as a percentage of equalized value (assessed full value)was
calculated and has steadily increased from 1991 to 2001. An average of 2.03%over this recent
10-year period indicates a very small portion of overall general obligation debt to assessed full
value. This is well under the credit industry's negative or warning trend of exceeding a 10%
annual increase allowance in overall net debt as a percentage of assessed valuation(Groves &
Valente, 1986, 81). The Village's trend is positive.
19
LONG-TERM DEBT PER CAPITA
DEBT INDICATOR 3
Winneconne's Trend: Long-term Debt per Capita
Positive
(constant dollars)
Warning Trend:
Consistently rising $1,000.00
constant dollar per capita $800.00
debt
$600.00 — — — —_""_-
Formula: $400.00
Total General Obligation
Debt/Current population ! $200.00
s_
FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
MIN General Obligation Debt Per Capita —Linear(General Obligation Debt Per Capita)]
Source:Graphing Revenues,Expenditures,and Taxes(G.R.E.A T.Program),
University of Wisconsin–Extension.
Fiscal Year FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Total general obligation debt $1,368,600 1,217,900 1,732,100 1,663,100 1,663,100 1,166,200 684,100 1,044,600 2,733,040 2,290,341 2,914,113
Current population 2067 2114 2149 2164 2196 2235 2308 2322 2322 2330 2419
Consumer price index(CPI) 105.73 109.69 113.40 117.84 121.55 124.05 127.20 128.81 131.32 135.27 138.66
General Obligation Debt Per Capita
•
(constant dollars) $ 626.24 525.22 710.76 652.18 623.06 420.63 233.02 349.25 896.30 726.68 868.80
Background
Measuring debt on a per capita basis is another way to monitor any increase (Clearwater, 1987,
46). Growth in debt changes relative to changes in population is shown by the per capita
measure. As population increases, capital needs along with long-term debt may also increase. If
the population is stable or declining, but long-term debt is increasing, "debt levels may be
reaching or exceeding the city's ability to pay" (1897, 46). There appears to be a direct
correlation between the municipality's "revenue generating ability and ability to repay debt,"
along with its level of population(1987, 46).
Analysis
Gross general obligation debt was divided by the total current population and then adjusted by
the 1990 Consumer Price Index to result in constant dollars for each of the 10 years from 1991 to
2001. The general obligation debt amount fluctuated somewhat, but the population has steadily
increased. These two factors have resulted in general obligation debt per capita to be somewhat
inconsistent,but quite positive overall for the Village of Winneconne.
411
20
• PENSION LIABILITIES
DEBT INDICATOR 4
Winneconne's Trend: Unfunded Pension Liability (Surplus)
Positive
0.12%
Warning Trend:
unfunded 0.10°%° `-'
pension liability as a 0.08% -- —
percentage of equalized 0.06% --- '
valuation. 0.04%
Formula: 0.02% _
Unfunded pension 0.00% -- ----
liability/equalized value FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
milm Unfunded pension plan liability(surplus)as a percentage of equalized valuation
-Linear(Unfunded pension plan liability(surplus)as a percentage of equalized valuation)
Source:Village of Winneconne Annual Financial Reports 1994,1995,1997—2001. Graphing
Revenues,Expenditures,and Taxes(G.R.E.A T.Program),University of Wisconsin—Extension.
Note:data for fiscal year 1995 was unavailable.
• Fiscal Year FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Unfunded pension plan liability(surplus) 81,402 83,955 0 88,209 90,438 92,000 94,533 96,338 98,341
Equalized value 73,213,600 74,982,200 81,380,200 92,961,900 96,343,500 105,219,500 108,474,200 119,153,700 129,963,700
Unfunded pension plan liability(surplus)as
a percentage of equalized valuation 0.11% 0.11% 0.09% 0.09% 0.09% 0.09% 0.08% 0.08%
Background
A government unit's pension plan can be a significant obligation for the community. Benefits
are either paid on an "as needed"basis or money is invested in a reserve until the time in which
benefits are actually paid. Growth in unfounded pension liability can place an increasing burden
on the tax base. This calculation assumes that the burden can be covered through increased
property tax payments as the primary revenue source.
Analysis
Winneconne's overall pension plan liability as a percentage of equalized value is positive,
however the Village's existing amortization schedule for its unfounded liability should be
reviewed. In 1990 the Wisconsin Retirement System(WRS) calculated increases in employee
pension benefits, which exceeded actual contributions. The Village amortized the liability
through the WRS over a 40-year term at 8% interest per year on the unpaid balance. During the
first 20 years the interest charged exceed actual payments made by the Village. Given today's
interest rate climate, the Village should discuss with its financial advisor the potential for
refinancing the WRS liability to take advantage of lower rates.
•
21
• COMMUNITY NEEDS
The effects of the local government's economic and demographic characteristics are
measured to some extent by the community's needs and resources' indicators (Groves & Valente,
1986, 107). Here, tax base, economic and demographic characteristics are treated as two sides of
the community needs and resources category (1986, 107). On one side, "tax base determines a
community's wealth and its ability to generate revenue" or level or personal and business income
(1986, 107). On the flip side are economic and demographic characteristics that affect
community demands—"such as those for public safety, capital improvements, and social
services" (1986, 107).
The changes in community needs and resources are interrelated in an ongoing,
cumulative, cause and effect cycle (1986, 107). When population and economic conditions
decline, the municipality's costs for delivering services also decline, but revenues will most
likely"decrease more quickly than costs due to the fixed costs build into the operations" (1986,
107).
It is difficult to translate community needs and resources into indicators because the
information necessary is not readily available (1986, 107). The indicators used here are those
that were not only requested by the former Village administrator, but also are those for which the
data was reasonably available. The analysis is intended to identify a rise or decline in the tax
base as measured by population, property values, median incomes and poverty status. (1986,
107).
The indicators included in the following Community Needs analysis are:
1. Village Population and Trends
2. Property Value and Trends
3. Median Incomes and Trends
4. Poverty Status of Population
Village of Winneconne Results
The analysis of Winneconne's community needs and resources' indicators reveals a
population that is increasing slowly. The population indicator is positive, and indicates that the
Village has the ability to generate additional income. However, the change in equalized value in
constant dollars has been inconsistent, with annual swings from large growth, to marginal growth
or even a decline in 1994. Review of the Village's equalized value composition revealed steady
residential growth over the 10-year period, while the manufacturing sector fluctuated and the
agricultural sector decline significantly. One surprising finding was that of the poverty status
indicator. The poverty status of the elderly is increasing in Winneconne, despite an overall
decline in the total population below the poverty level along with a decline in poverty for
families. Median income for families, households and per capita in constant dollars also
increased during the 10-year period.
•
22
• VILLAGE POPULATION AND TRENDS
COMMUNITY NEEDS INDICATOR 1
Winneconne's Trend: Village Population and Trends
Positive
2500 --___ __.,
2400
Warning Trend: 2300 —
Rapid change in �`�.
population 2200 _�--
2000
Formula:
1900
Population
1800
FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
I�Population Linear(Population)
Source:Graphing Revenues,Expenditures,and Taxes(G.R.E.A T.Program),University of
Wisconsin—Extension.
Fiscal Year: FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Population 2067 2114 2149 2164 2196 2235 2308 2322 2326 2330 2419
Background
Any "relationship between population change and other economic and demographic factors is
uncertain" (Groves & Valente, 1986, 109). Government revenue can be directly affected by
population change "since many intergovernmental revenues and grants are distributed according
to population" (1986, 109). Immediate pressures for"capital outlay and higher levels of service"
can be driven by a sudden increase in population(1986, 109).
However, a decline in population may appear to ease expenditures, but a municipality facing a
declining population is seldom able to reduce expenditures that are proportional to the population
loss (1986, 109). Many costs are "fixed and cannot be reduced in the short term" (1986, 109).
Government services may become more relied on especially if those from middle and upper
income households are leaving—with the poor and elderly left behind (1986, 109). There is an
interrelationship between"population levels and other economic and demographic factors"that
"tends to give a population decline a cumulative negative effect on revenues" (1986, 109). A
greater population decline results in additional adverse "effects on employment, income, housing
and business activity" (1986, 109).
Analysis
The Village of Winneconne population from 1991 to 2001 reflects a slow, but steady growth
increase, with an average of 1.55% growth annually over the 10-year period analyzed. A
411 positive trend emerges because there is no rapid change in either direction.
23
•
PROPERTY VALUES AND TRENDS
COMMUNITY NEEDS INDICATOR 3
Winneconne's Trend: Equalized Value Trends
Inconsistent (constant dollars)
Warning Trend: 14.00% — ---- - - --- --�_
Declining growth or drop 12.00%
in the equalized value of 10.00%
residential,commercial or 8.00%
industrial property
(constant dollars) 6.00% ---- — —-.
4.00%
Formula: 2.00% - -
Change in property value 0.00% — — I1 - — r-- ❑ — ❑ — ---
(constant dollars)/Prior -2.00% 90 FY91 FY92_FY93 F9�9!4_FY95 .FY96--F_Y97_EY9E- FY99 FY00 FY01..
year property value 4.00%
(constant dollars)
Percent change in equalized value(constant dollars)
—Linear(Percent change in equalized value (constant dollars))
Source:Graphing Revenues,Expenditures,and Taxes(G.R.E.A T.Program),University of
• Wisconsin—Extension.
Fiscal Year FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Equalized Value(taxable value) 51,894,500 57,494,000 84,163,400 73,213,600 74,982,200 81,380,200 92,961,900 96,343,500 105,219,500 108,474,200 119,153,700 129,963,700
Consumer Price Index 100.00 105.73 109.69 113.40 117.84 121.55 124.05 127.20 128.81 131.32 135.27 138.66
Equalized Value(constant dollars) 51,694,500 54,378,133 58,495,214 64,562,257 63,630,516 66,952,036 74,939,05775 ,741,745 81,685,816 82,602,955 88,085,828 93,728,328
Equalized Value prior year(constant dollars) 51,694,500 54,378,133 58,495,214 64,562,257 63,830,518 66,952,03e 74,939,057 75,741,745 81,685,816 82,602,955 88,085,828
Percent change in equalized value
(constant dollars) 5.19% 7.57% 10.37% -1.44% 5.22% 11.93% 1.07% 7.85% 1.12% 864% 6.41%
Background
Equalized values are development by the Wisconsin Department of Revenue for each taxing
jurisdiction on an annual basis using local assessed value information, evaluation of market value
changes and new construction to establish a uniform value at 100% of market value. The
equalized values are important because they are used to apportioning county property tax,public
school taxes, vocational school taxes and for distributing property tax relief, including a portion
of the State Shared Revenue formula. Locally, the value of property is the single most important
factor for generating property taxes to support the general fund operations of the government unit.
Analysis
Winneconne's equalized value as established by the Wisconsin Department of Revenue has
grown each year from 1990 - 2001. However, when the equalized value is adjusted to constant
dollars, the annual changes in value appear unstable. These annual swings from high levels of
constant growth to an annual decrease in constant dollars require a more careful look at each
segment of the equalized value. The following page includes Winneconne's equalized valued by
category (residential, commercial, manufacturing, agricultural, other and personal property) for
• 1990 - 2001. Residential value has remained predominately stable and growing over the 10-year
period, while manufacturing value dipped slightly during the mid 1990's before rising again.
24
0 As should be expected given the change to use-based valuation for agricultural land, the
agricultural value from 1990 - 2001 dropped dramatically in Winneconne.
Equalized Property by Category
(constant dollars)
90,000,000
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000 -
30,000,000
20,000,000
10,000,000 -
ll
F.
FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
•Residential Valuation■Commercial Valuation❑Manufacturing Valuation
• Source:Graphing Revenues,Expenditures,and Taxes(G.R.E.A T.Program),University of Wisconsin-Extension.
Fiscal Year FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01
Residential Valuation(land&improvements) 42,990,400 48,351,100 53,867,200 62,853,600 64,203,400 70,377,800 80,129,900 82,538,200 90,500,800 91,942,900 101,542,100 109,906,700
Residential Valuation(constant dollars) 42,990,400 45,730,729 49,108,579 55,250,088 54,483,537 57,900,288 64,594,841 64,888,522 70,259,141 70,014,392 75,066,238 79,263,450
Commercial Valuation(land&improvements) 5,666,100 5,815,000 6,169,600 6,371,400 6,690,000 7,950,800 8,312,200 9,257,400 10,119,100 11,985,000 12,470,700 13,233,100
Commercial Valuation(constant dollars) 5,666,100 5,499,858 5,624,578 5,618,519 5,677,189 6,541,176 6,700,685 7,277,830 7,855,834 9,126,561 9,219,117 9,543,560
Manufacturing Valuation(land&improvements) 1,608,800 1,917,400 2,523,700 2,630,700 2,118,600 2,418,300 2,545,100 2,644,100 2,744,000 2,892,600 3,377,200 4,336,000
Manufacturing Valuation(constant dollars) 1,608,800 1,813,487 2,300,757 2,319,841 1,797,862 1,989,552 2,051,673 2,078,695 2,130,269 2,202,711 2,496,636 3,127,073
Agricultural Valuation(land&improvements) 79,900 80,800 80,500 80,800 84,000 82,700 66,800 66,800 58,000 52,500 20,000 20,300
Agricultural Valuation(constant dollars) 79,900 76,421 73,389 71,252 71,283 68,038 53,849 52,516 45,028 39,979 14,785 14,640
Other(land&improvements) 0 0 0 0 0 0 16,600 19,100 23,100 27,200 31,700 35,000
Other Valuation(constant dollars) 0 0 0 0 0 0 13,382 15,016 17,933 20,713 23,435 25,242
Personal Property Valuation 1,349,300 1,329,700 1,522,400 1,477,100 1,886,200 550,600 1,891,300 1,817,900 1,774,500 1,574,000 1,712,000 2,432,600
Personal Property Valuation(constant dollars) 1,349,300 1,257,637 1,387,911 1,302,557 1,600,645 452,982 1,524,627 1,429,167 1,377,610 1,198,599 1,265,617 1,754,363
Equalized Value(taxable value) 51,694,500 57,494,000 64,183,400 73,213,600 74,982,200 81,380,200 92,961,900 96,343,500 105,219,500 108,474,200 119,153,700 129,963,700
Total Equalized Value(constant dollars) 51,694,500 54,378,133 58,495,214 64,562,257 63,630,516 66,952,036 74,939,057 75,741,745 81,685,816 82,602,955 88,085,828 93,728,328
Consumer Price Index 100.00 105.73 109.69 113.40' 117.84 121.55 124.05 127.20 128.81 131.32 135.27 13866
25
MEDIAN INCOMES AND TRENDS
COMMUNITY NEEDS INDICA OR
4
Winneconne's Trend: Median Income by Household, Family and Per Capita
Positive
(constant dollars)
Warning Trend: $50,000
Decreasing median $40,000 w — --
household, family,or per
capita income(constant $30,000 �. 1,
dollars) $20,000
$10,000 l
Formula: Median Household
. ...
Median household, family Median Family Income Per Capita Income
&per capita income Income(constant
(constant dollars) (constant dollars)
/consumer price index dollars)
®1990 Census 12000 Census
Source: 1990 and 2002 U.S. Census
Consumer Price Index 1990 Census 2000 Census
Median Household Income 100.00
• Median Household Income constant dollars $29356 $44 886
Median Famil Income $29,356
Median Famil Income (constant dollars) $34,556 $53,477
Per Ca•ita Income $40,723
Per Capita Income (constant dollars) $11,906 $20,316
$11,906 INEEEKEU
Backgr :
One measure of a community's ability to pay taxes is the income of residents: "
capita income, the more property tax, sales tax, income tax and business tax the
generate"(Groves & Valente, 1986, 115). If income is evenly s. "the higher the per
income will generally mean a lower dependency on municipal services community can
these indicators causes a drop in consumer y distributed, a higher per decline p cos (tin a,downward a decline in
the local economy (1986, 115). purchasing power that can begin a downward trend in
Median family income is a particularly useful measure because
"because the need for municipal services is often more directly related to household income than
to personal income per capita" (1986, 115).
(Note: The term,family, includes married-couple families and female or male householder with
under 18 years of age. Households include families,along with non-family households or a house
alone.) their own children
householder living
Anal sis:
This indicator reports the median or midpoint of the household, family and
the Village of Winneconne and shows an increase—yielding a positive tren
• Y per capita incomes of
trend.
26
0
POVERTY STATUS OF POPULATION
COMMUNITY NEEDS INDICATOR 5
Winneconne's Trends:
• Positive trend for Poverty Status of Population
families and
children 12.0% -- ° 10.5%
• Negative trend 10.0% 9.8/0
for persons 65 8.0%
° 6-5'
years and over 6.0% ° 5 8%
4.0% r4 a.6/o 3.4%
Warning Trend: 2.0% ''
Increasing proportion of 0.0% � <
poverty households or Total population Persons 65 years Related children Families below
public assistance below poverty level and over below under 18 years poverty
recipients poverty below poverty
■1990 Census ■2000 Census
Source: 1900 and 2002 U.S. Census
Fiscal Year 1990 Census 2000 Census
• Total population below poverty level 6.5% 4.7%
Persons 65 years and over below poverty 5.8% 9 8%
Related children under 18 years below poverty 10.5% 3.6%
Families below poverty 4 8% 3 4%
Background:
If the proportion of poverty households or public assistance recipients increases, a future increase
in the level and cost of some services can result because low-income households have relatively
higher needs along with"a relative lack of personal wealth" (Groves & Valente, 1986, 118).
Analysis:
The available information for the Village of Winneconne reflects a positive trend for families,
related children and total population—falling below the poverty threshold previously set in 1990.
Upon closer observation, the further breakdown of age groups and poverty status reveals that for
those residents 65 years of age and older, there is an increase of 4% between 1990 and 2000,
according to the U. S. Census Bureau statistics.
•
27
• SUMMARY AND CONCLUSIONS
The overall financial condition of the Village of Winneconne is positive, with a few areas
of concern or need for additional review by deVillage
ncl unions to the pofficials
receding report and associated administration.
data,allow for ease in comparing this summary
data, the summary and conclusions are provided by the factors of analysis: revenues,
expenditures, operating position, debt and community needs.
Revenue Analysis Results
This analysis focused on four revenue indicators (own-source revenues verses total
revenues, intergovernmental revenues, revenues by category and equalized tax rate). The results
were positive overall,while there were a few fluctuations in the composition of Winneconne's
revenues and the growth in revenues when adjusted for inflation. There was an increasing
reliance by the Village on own-source revenues. Since the fiscal condition of the State of
Wisconsin, and associated intergovernmental aids, is in question at this time an increasing
percentage of own source revenues will likely be necessary to provide public goods and services.
Winneconne's revenue composition from 1900 to 2001 included growth in total taxes and public
charges for services in constant dollars. It is important to note that in constant dollars the Village
has not increased its collection of revenues for licenses, permits, fines and penalties or
intergovernmental charges for services during the period of analysis. These two areas appear to
not have kept up with inflation and should be reviewed by the Village.
Winneconne's equalized tax rate has remained relatively stable over the four-year period
• of analysis without significant rate adjustments, which indicates that the total Village tax levy
has remained consistent with the equalized value changes. When reviewed with other
communities from the region of like size, Winneconne's equalized tax rate is comparable from
1998 to 2001.
Expenditure Analysis Results
The analysis of the general fund expenditures per capita and employees per 100
population to understand the Village's expenditure position revealed mixed results. The per
capita general fund expenditures (excluding capital costs)have risen over$100 from 1994 to
2001 even when adjusting for inflation. This would indicate an increasing burden on the
taxpayers of Winneconne and should be monitored in the future. The trend also raises questions
about the cause of the increase despite the adjustment for inflation. Has the Village seen
additional demand for services? Are there additional programs or services that the Village has
added, or grant funding that previously covered costs for services expired? Are there additional
mandated services being provide by Winneconne? The trend is not cause for alarm but deserves
additional investigation by Village elected officials and the administration.
In contrast,the Village's employment per 100 residents from 1994 to 2001 has remained
stable with an average of less than one employee per 100 population. The comparison with other
communities presented that Winneconne's full-time employment indicator results are similar to
the comparable communities of Berlin,North Fond du Lac, and Omro while slightly higher than
Hortonville and Sherwood.
•
28
• Operating Position Results
The utility operating funds and the undesignated general fund reserves as a percentage of
the general fund operating expenditures from 1994 to 2001 were obtained, studied and compared.
The utility operating fund consists of the water and sewer enterprise fund's net income and has
shown a surplus in each of the eight years of available information—despite a major expenditure
on well improvements in 1999 and 2000 (Jensen, 2003).
The undesignated general fund balance to general fund operating expenditures from 1994
to 2001 has fluctuated slightly, but has remained rather stable and reflects a positive ratio. By
maintaining a stable level of reserves on an annual basis, the Village preserves its ability to
respond to an unforeseen need or crisis. However, the Village should review its reserve policy in
relationship to its insurance coverage and overall financial health to establish a consistent level
of reserve that will be dedicated to addressing nonrecurring unanticipated expenditures or
emergency needs if such a policy is not already in place.
Debt Analysis Results
The Village of Winneconne's debt structure is positive. The Village's trends are within
industry benchmarks and indicate that there is no reason for concern in this area. The
composition of the accounts payable portion of the current liabilities requires additional
clarification,therefore the Village should consult with its financial advisor for a more complete
analysis of this indicator trend. The pension liabilities as a percentage of equalized value
declined from 1993 to 2001 indicating a positive trend. However, Winneconne's liability to the
Wisconsin Retirement System (WRS) from 1990 was amortized over a 40-year term at 8%
• interest per year on the unpaid balance. While these terms may have been appropriate in 1990,
given the interest rate climate today the Village should consult with its financial advisor about
the potential for refinancing the WRS liability to more favorable terms.
Community Needs Analysis Results
The analysis of Winneconne's community needs and resources indicators reveals a
population that is increasingly slowly. The population indicator is positive, and indicates that the
Village has the ability to generate additional income. One surprising finding was that of the
poverty status indicator. The poverty status of the elderly is increasing in Winneconne despite an
overall decline in the total population below the poverty level, including a decline in the poverty
of families. Median income for families, households and per capita in constant dollars also
increased during the 10-year period of analysis.
However, the equalized value trend analysis (constant dollars) as a portion of the review
of community needs revealed an inconsistent pattern from 1990 to 2001. The change in
equalized value in constant dollars has fluctuated substantially, with annual swings from sizeable
growth, to marginal growth or even a decline in 1994. A review of the Village's equalized value
composition over the same 10-year period in constant dollars revealed steady residential growth,
while the manufacturing sector fluctuated and the agricultural sector decline significantly. This
inconsistency in the equalized value growth in constant dollars should be monitored since it is
critical to the Village's ability to generate property tax revenues in pace with the growth in the
"cost of doing business" with expenditures for services.
29
410 RESOURCES
City of Clearwater: Evaluation of Fiscal Conditions and Financial Indicators. (2001,
September 30). Office of Management and Budget, Clearwater, Florida.
City of Clearwater: Evaluation of Fiscal Condition and Financial Indicators. (1987,
April). Budget Office, Office of the City Manager, Clearwater, Florida.
Groves, S. and Valente, M. Godsey. (1986 and 1994 edits). Evaluating Financial
Condition:A Handbook for Local Government. Washington, D. C.: International City
Management Association.
Graphing Revenues, Expenditures and Taxes (G.R.E.A.T.) - Version 2.01. University of
Wisconsin Extension. June 2002.
Guide for Property Owners. (2002). Wisconsin Department of Revenue, Division of
State and Local Finance, Bureau of Assessment Practices, Madison, Wisconsin.
U. S. Department of Commerce, Economics and Statistics Administration, Bureau of the
Census. (2003, March). http://www.census.gov/
• Village of Winneconne, Wisconsin. (1994). Village of Winneconne, Wisconsin Annual
Financial Report December 31, 1994.
Village of Winneconne, Wisconsin. (1995). Village of Winneconne, Wisconsin Annual
Financial Report December 31, 1995.
Village of Winneconne, Wisconsin. (1997). Village of Winneconne, Wisconsin Annual
Financial Report December 31, 1997.
Village of Winneconne, Wisconsin. (1998). Village of Winneconne, Wisconsin Annual
Financial Report December 31, 1998.
Village of Winneconne, Wisconsin. (1999). Village of Winneconne, Wisconsin Annual
Financial Report December 31, 1999.
Village of Winneconne, Wisconsin. (2000). Village of Winneconne, Wisconsin Annual
Financial Report December 31, 2000.
Village of Winneconne, Wisconsin. (2001). Village of Winneconne, Wisconsin Annual
Financial Report December 31, 2001.
Wisconsin Department of Workforce Development. Labor Market Indicators.
• http://www.dwd.state.wi.us/lmi/wi_econ_indicators.html
30
4
S
ACKNOWLEDGEMENTS
Mitchell, J. (2003, April 25). Personal interview. Administrator, Village of Hortonville,
Hortonville, Wisconsin.
Kutchenriter, L. (2003, April 25). Personal interview and e-mail correspondence. City
Clerk, Administrator, and Treasurer, City of Omro, Omro, Wisconsin.
Jensen, J. (2003, April 17). Personal interview and e-mail correspondence, Clerk,
Village of Winneconne, Winneconne, Wisconsin.
Johnson, E. (2003, April 1). Personal interview via e-mail correspondence. Village
Administrator, Village of Winneconne, Winneconne, Wisconsin.
Ruch, K. (2003, April 28). Personal interview and e-mail correspondence. Treasurer,
Village of North Fond du Lac,North Fond du Lac, Wisconsin.
Trochinski,N. (2003, April 24). Personal interview and e-mail correspondence.
Treasurer, City of Berlin, Berlin, Wisconsin.
• Von Lieshout, J. (2003,April 24). Personal interview. Village Coordinator, Village of
Sherwood, Sherwood, Wisconsin.
•
31