Police split helps Colby receive additional aid from state City to borrow for capital expenses portion of 2024 budget

The city of Colby ran through the preliminary 2024 budget at its annual budget meeting on October 2.

The city is expecting $1,750,498 in budgeted revenue through taxes, state shared revenue, transportation aids and other sources. The city will collect $767,398 from property taxes next year.

The city’s budgeted general expenses were estimated at $1,699,252 after adjusting for the 2.5% decrease in the police funding agreement which was approved later in the meeting. Gurtner said before the police budget was lowered, the city’s general expenses were at $1,721,914 which meant the city would not qualify for the Wisconsin Department of Revenue’s expenditure restraint program (ERP). The ERP gives unrestricted aid to qualifying municipalities that limit growth in spending.

To qualify for the program, residents of the city would need to have a property tax rate of at least five mills. The city of Colby’s 2022-2023 mill rate was 7.04. The municipal budget must also not increase the prior year’s budget by more than an inflation factor plus a valuation factor.

In 2020, 140 cities were awarded $52,833,570 in aid for the program. Gurtner said Colby was about 1.2% too high of an increase over last year’s budget to qualify for the program initially. However, with the city’s share of the police budget being trimmed by $22,662, she said the city should qualify for assistance.

Gurtner said the city gets about $25,000 in assistance when qualifying for the ERP.

The city also accounted for $818,250 in capital expenses which included $558,250 in anticipated street construction costs and $235,000 in machinery and equipment costs. City Clerk Connie Gurtner said the city would need to borrow money for those capital expenses. Gurtner said although the capital expenses required borrowing right now, her hope is that a new prospective development in the city’s TIF district would allow those expenses to be paid for using TIF revenue.

“To me if we borrow for that, because equipment’s not getting any cheaper, it will last more than one budget cycle so we really out to borrow that money and pay for it over time rather than not pay for it and then this time next year, it costs 10% more,” council member Todd Schmidt said.

Gurtner said borrowing for capital expenditures was not a concern for her.

“I think we’re in a decent position that we’re only needing to borrow really what our capital expenditures are,” Gurtner said. “It’s not like we’re borrowing to maintain our budget.”

Gurtner told the board that if the city were to borrow for the capital expenditures projects for next year, the item would be listed under the city’s general expenses fund next year but it would not affect the city of Colby’s tax levy. When calculating the city’s tax levy, debt is deducted from the city’s expenses and then added back into the budget after the levy has been calculated meaning a potential loan on the capital expenditures wouldn’t directly come from the tax levy.

The budget will be published for public consumption and will undergo a public hearing before being approved by the council at a later meeting.

The city has received an offer to purchase six lots in the city’s industrial park from ND Real Estate Holdings. The plans would include an office space for a trucking company with potential for a shop to be put up in the future.

The council was told that the lots have been for sale for awhile and the city would offer the company the lots for $1. The incentive to sell the lots for $1 was presented because the business gave the city a plan for the office building that would be put up and it was decided at a previous planning commission meeting that the tax revenue from the development would be more beneficial for the city than if it waited for someone to pay the estimated $90,000 in land value down the road for a lesser project.

The city will need to come up with a developer’s agreement which will lay out the terms of the deal more clearly. In that agreement, the city could say the developer needs to have a building that is worth “x” amount of dollars in assessed value to ensure the city is getting the tax revenue it expects. The council approved going ahead with the developer’s agreement, unanimously. The proposal includes both financing and a developer’s agreement contingencies.

“These lots have been for sale since I started here in 1995 so I think this is a great development for that area,” Gurtner said.

Police funding split

The council heard an update on the police commission meeting and in that, was an update on discussions with Abbotsford regarding the funding split between the two communities. The council was told that the Abbotsford City Council had approved a 2.5% increase to their end of the funding split and for the agreement to not be revisited for five years.

Schmidt told the council that he hoped to bring the numbers to the police commission every year regarding number of calls, equalized value changes, population and others that might affect the divide of work between the two municipalities. Those numbers would not be part of a funding discussion but would give the commissioners insight into the changing landscapes of the cities.

Council members noted that five years would be a long time and many things within the two cities could change between now and then but ultimately decided to accept the proposal.

“The 2.5 percent, I could see taking but I don’t agree with waiting five years to revisit it,” council member Dan Hederer said.

Schmidt and Gurtner said the motion from Abbotsford to approve the 2.5% increase for five years could always be revisited and changed to allow the commission to revisit the proposal next year, in two years or any time along the five-year stretch.

The council was generally in agreement that the 2.5% increase was better than nothing but certain members were not pleased with the agreement.

“It’s better progress than we’ve made in 50 years,” Nancy O’Brien said.

“I don’t think this is bad. I think this is a great idea and a good compromise but I’m one who wants numbers to be tied to some reason or purpose behind it,” Gurtner said.

The motion went to a vote and passed unanimously.

“It’s a start,” O’Brien said.

Other business

n The city is planning to apply for a safe routes to school grant in conjunction with the Colby School District. If the city were to be awarded the grant, money could be used for sidewalks, bike lanes or other opportunities to help allow students to walk or bike to school.

The council approved the motion to pay not more than $1,500 to explore the program.