Budget season is in full swing at Shawano City Hall, but officials are looking beyond 2025 as they try to sustain the current level of services to city residents.
City Administrator Eddie Sheppard told the Shawano Common Council on Aug. 14 that revenue restraints are prompting officials to look at several other options to receive funding and deal with soaring costs on everything in recent years.
“On operations, we’re restricted, and that’s really been exacerbated over the last few years with increasing costs,” Sheppard said. “We’re a large consumer, so when things cost more, they cost more to us, as well. We’re really in a time where we need to identify alternative revenue streams to offset some of our operational costs.”
Shawano’s not alone with this problem, according to Sheppard, as municipalities everywhere are feeling the pinch. He suggested three things that would provide additional revenue not restricted by the state that would allow standard operations in the city to keep going.
Sheppard’s first suggestion was a vehicle registration fee that could be up to $40 per vehicle.
“More and more cities are doing that,” Sheppard said. “In fact, there are currently 41 who have implemented vehicle registration fees as revenues to help offset their street maintenance work. I would anticipate that number to grow, if not double, in the next couple of years as municipalities are feeling the crunch.”
Sheppard said the funding could pay for things like snowplowing, pothole patchwork and more. He noted that street work, not counting capital projects, takes up about $1 million in the city’s budget currently.
The second suggestion was developing a stormwater utility. Sheppard noted that the idea had been floated by the city before he came along, but the matter is getting more attention as funding tightens.
“Why that’s relevant in our situation is because, when our city reaches 10,000 people, we have to operate under what is known as an MS-4 permit, which brings along a bunch of other requirements that are going to be costly for the city to address,” Sheppard said.
Among those requirements are paving alleys, pretreating stormwater before it hits the Wolf River and more. With those future costs, the current batch of money received from state aid and property taxes won’t cut it, Sheppard said.
“You can’t use it to offset anything that you’re doing now,” he said. “It’s only for costs above and beyond what we have today.”
The current population for Shawano is 9,236, according to the latest U.S. Census estimates released in May. However, with new homes being placed where the old Shawano Medical Center used to be, more new homes east of Shawano Community High School under construction and other projects designed to bring more people to live in the city, Shawano could reach 10,000 people in the future.
Even with all the new construction in the city, that’s not translating into more revenue, according to Sheppard. Shawano is expecting a maximum increase in the revenue limit of $160,000 this year due to the state’s formula for determining levy limits.
Sheppard’s third suggestion was to have the city go out for an operational referendum, similar to what area school districts have been doing. The city would ask voters to allow it to exceed its revenue limit by a certain amount for several years and then would have to ask for a renewal at the end of the term, if necessary.
“We haven’t talked about that,” Sheppard said. “We haven’t seen a need for that because we’ve been able to manage our annual increases by being efficient and cutting costs where we can.”
However, the cost of doing business has exceeded what the city sees in annual revenue increases. Sheppard noted that the revenue increase is less than 1%, but inflation has increased costs by 3.8%.
He added the problem has prompted more municipalities to ask for an operational referendum. In the most recent August election, there were eight Wisconsin municipalities that had a referendum on the ballot, he said.
“In the past, referendums for operations would have seemed to be crazy,” Sheppard said. “Unfortunately, there are people who have exhausted all their other revenue options, and the only way they can continue manage their ongoing costs that are increasing for their people, and the materials they’re buying, and all the stuff they do on a daily basis is to ask the community to go outside that limit.”
Sheppard added that the city is expected to look over its operational budget in the next few weeks, and the suggestions he presented could be part of the discussion.
“We can no longer continue to hammer the levy for everything,” Sheppard said. “It’s in the city’s best interest to look at other alternatives to find revenues to soften that blow.”
Mayor Bruce Milavitz recommended the council members talk with people in their districts to look at what alternatives would work for them. He noted that while the city’s growth presents a lot of excitement, the restrictions on increasing funding hurts the city as it transitions into the future.
“We can’t take advantage,” Milavitz said. “Our services are stretched out on a larger base.”
Milavitz noted that Shawano is being seen as a test city for discussing alternative funding.
“We’re a perfect example of up-and-coming large growth, but our tax base is not able to keep up,” Milavitz said.
lpulaski@newmedia-wi.com
Categories
