Quest for Transparency - The Budget

Hello everyone,


It’s budget time for Kewaunee City Council. And I have noticed that our budget often mystifies people. One reason is that we don’t publish the budget in an easily understandable way. We do not have the 2021 budget or even the actual 2020 numbers posted on the city’s website. Many cities have these numbers laid out, easily accessible and up to date. Another reason that our budget is confusing is that it contains a lot of different funds, bonds and loans categorized in ways that an average person may not understand. There are also potential grants posted that may or may not come in. That often changes the revenue numbers wildly. For example, our 2021 budget revenue is over $11 million, but the one grant for a business park is $3 million and it may not come in this year, or even at all. That’s a little like buying a lottery ticket and counting on it for your home budget.


So I’ll try to explain the budget as simply as I can. I’ll give you 2020 numbers because they are real, and 2021 numbers have some wishful thinking and we will know better how accurate they are in six months.


In 2020 our property taxes were $1,091,474. But that makes up about a third of the General Fund, which is the fund that pays most of the salaries and keeps the lights on in City Hall. So where does the other money come from? Well, we have lots of small taxes and fees, like Hotel Room Taxes, which are around $21,000. There are also cemetery plot sales and around 50 other small things that add up to around $700,000. But there are some other big helpers. The state of Wisconsin, through the taxes it collects, gives us around $600,000. And we get around $180,000 to take care of the highways that are running through town. Garbage pickup nets around $158,000 and ambulance fees came in at $272,000 for 2020, which was a big year. That all added up to $3,010,000 for the Covid year. And that was about 3% more than the year before. Grants picked up where other things dropped off. So financially, Covid did not really hurt City Hall, but you could certainly argue by the ambulance revenue, that there were people in Kewaunee who suffered.


Then there is our Enterprise fund. This is Sewer and Water, which pulled in $1,559,557. This part of the budget—to very briefly summarize, pays for drinking water, water drainage and sewage and cleaning and filtering of water at different phases. It includes money from the fire department—you can’t fight fires without water. This revenue is mostly to help pay for the maintenance of the system. Major reconstruction like Dodge Street is in a different category. Yes, the sewer and water system and fire hydrants will be new, but it’s under a different budget category. But cleaning and keeping the water flowing, plus fixing issues that come along are handled by your water bill. This number has been quite consistent for the past four years—it has increased about 6% during that time.


Now here comes a bit of a problem. The Marina underperformed in 2020. Costs skyrocketed and revenue dropped about 60%. The very high water levels had a terrible impact and Covid certainly caused a huge drop in business. That being said, the revenue of $310,000 in 2018 turned into $111,000 in 2020. The Marina turned from a slight moneymaker into a decided money loser, with expenses higher than expected and revenues much lower. This year will come in worse than we hoped, but with our new facilities like the boat launches and with Covid behind us, we are better structurally set and are hopeful to be profitable next year and in the years to come.


There is another issue that I don’t think gets enough attention—population growth. Some people say that we need to build a bunch of new homes for increased tax dollars, but the first step is always for the city to spend hundreds of thousands of dollars, sometimes even millions building infrastructure. So the city loses money for many decades before they can recoup their losses through taxes on the new homes. Just to be clear, I am in favor of every new home built by developers with their own money. But there is another way to increase and maintain population that doesn’t cost the city anything. Habitat for Humanity figured out many years ago that old homes ARE affordable housing. With building costs what they are, you can’t build a low cost home. So when we knock down blighted homes instead of fixing them up, we lose population. We lose tax dollars. But we always seem to spend large tax dollars on projects like Scott Street, Fisherman’s Point or the Marquette School site to get a few homes. Kewaunee lost 120 people in the last decade, as did every other town in the county outside of the Green Bay metropolitan area. We can’t afford to knock down any home that can be fixed. We need every house that can be saved. Increased home value raises property taxes without costing the city a dime.


If we could rezone the downtown area from industrial/business to multi-family housing with great views, I believe those condos would sell, and we would have a ready population to spend money at all the downtown businesses. Our greatest resource in Kewaunee is our magnificent views of our lake and river. We should be capitalizing on this valuable asset for population growth in the downtown area.


Now comes the issue everyone has been eagerly anticipating—grants. Grants are like when an athlete gets his first pro football contract. Every friend and relative he’s ever had shows up hoping for some windfall. But in the case of a city, it’s the vendors. Something that seems straightforward suddenly needs to have engineering consultants and studies paid for. And soon you can spend $800,000 moving dirt from the west side of the city to the east side of the city. $1,750,000 can be spent in the blink of an eye, where we have three buildings off the tax roll and all we have to show for all that money is a green space at the end of a gravel road in a floodway. The Blight Elimination Grant money is disappearing before our very eyes. Our property tax revenue will go down at least $20,000 annually and we don’t even know if we will ever be able to build on Fisherman’s Point. There will be so many costs to the city to get proper roads, sewer and water pipes into Fisherman’s point, let alone dealing with the floodway issues. To use the old adage, if you’re that gullible ...I have some swampland in Florida to sell you. Well here in Kewaunee, we have our own swampland called Fisherman’s Point. And the vendors will happily leave Kewaunee with millions of dollars of grant money in their pockets.

I’ll keep you up to date as we go through the budget process over the next three months. It can be boring, but it’s important. We have to spend our tax dollars wisely, because there are lots of companies trying to get a piece of that pie.


Thanks for listening,

Wendy

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