On August 17, 2022, the Village of River Hills Board of Trustees approved a resolution (copy of resolution) to include a referendum question on the November 8, 2022 General Election ballot. The referendum will ask Village voters whether or not the Village shall be allowed to exceed its tax levy limit by a percentage 9.875% or a fixed amount of $300,000 each year for the next five years (2023 to 2027). The five-year time-frame is based on the prospect of increased responsible residential development as a means to increase the Village tax base. The funds will be to support ongoing police, public works, general government, general fund capital improvements and capital purchases. The Village Board is looking for the voters to make a decision on the level of local government services that they desire and the amount of taxes that they are willing to pay for those services.
On November 8, 2022 Village residents are being given the power to move forward regarding the tax levy.
Ballot Language – “Under state law, the increase in the levy of the Village of River Hills for the tax to be imposed for the next fiscal year, 2023, is limited to 0.787% which results in a levy of $3,038,080. Shall the Village of River Hills be allowed to exceed this limit and increase the levy for the next fiscal year, 2023, for the purpose of maintaining existing public service levels for police, public works, general government, general fund capital improvements and capital purchases, by a total of 9.875%, which results in a levy of $3,338,080, and include the increase of $300,000 for fiscal years 2023 through 2027?”
THE EFFECT OF A ‘YES’ VOTE:
A ‘YES’ vote allows the Board of Trustees to exceed the state-imposed levy to provide funding for the operations budget for the Village in order to continue to maintain the current level of services that the community has come to expect.
THE EFFECT OF A ‘NO’ VOTE:
A ‘NO’ vote does not allow the Board of Trustees to exceed the levy limit. The anticipated increase for the operations budget for the Village per state levy requirements is estimated at $20,197 for 2023, while the actual increase is approximately $250,000. The levy will stay the same and further limit the village’s ability to continue the current level of services. The Village will have to eliminate public safety and public works services including personnel.
The Village of River Hills is currently providing a level of service to people as they have for the past ten years, with essentially less staff. State mandated constraints on the Village’s levy limit have limited the Village’s authority to fund the current level of services provided. Therefore, this referendum is asking for your agreement to provide for an increase in taxes to support the current level of Village services.
|Total Regular Employee Positions|
|Police Department||14 sworn officers, 5 part-time clerks||11 sworn officers, 1 full-time court clerk, 3 part-time clerks|
|Public Works Department||7 full-time, 3 part-time summer||7 full-time, 1 part-time summer|
|Administration Department||2 full-time, 2 part-time||2 full-time|
|Building Inspection||2||contracted out|
IMPACT ON POLICE SERVICE LEVELS
The loss of a police officer position would significantly limit the ability of the Police Department to provide the services that the community demands. The current police staffing levels have already been reduced. The loss of a police officer position would increase the percentage of single officer shifts which currently don’t exist. The police department operates with a two officer per shift minimum. The risk of understaffed shifts is severe and represents greater danger for our citizens, visitors, neighbors and officers as well. Response times to calls for service would increase. This places the public at risk due to delayed response or an insufficient response to an incident. Consistency of service would suffer as the Village would become more reliant on mutual aid from neighboring departments. Limited staffing would also trigger overtime costs.
The Police Department has identified the following estimated decreases in service levels that would result from the loss of a police officer position:
- Home Checks
- Traffic Enforcement
- School Traffic and Patrol Directives
- Overnight Crime Prevention Patrols
- Special Patrol Programs
Additional service level reductions would also be necessary. Other services that would be considered for reduction or elimination would include vehicle lockouts, response to rescue calls (unless requested by Fire/EMS), and response to non-criminal animal complaints (sick/injured/stray).
IMPACT ON PUBLIC WORKS SERVICE LEVELS
The Village’s Public Works Department operates with an extremely lean staffing level compared to other similar departments. The staffing situation has been further exacerbated over the years by the addition of other services provided by the department based on public demand.
The loss of a Public Works position would require a significant reduction in services provided by the department. The services proposed for reduction or elimination are non-essential. They are not core functions but rather quality of life service and conveniences for the Village’s tax payers. They include many of the little things that help make River Hills what it is and define how we present ourselves. Public Works services proposed for elimination or reduction due to the loss of a Public Works position include the following:
Reduction/Elimination of Services Provided
- Brush collection
- Tree Maintenance
- Landscape maintenance
- Roadside mowing
- Support of Library operations
- Special projects
IMPACT ON GENERAL GOVERNMENT LEVELS
The loss of a general government or an administrative position would directly impact the customer service level provided to the public by the administrative staff. It has been estimated that 84% of the services provided by the administrative staff are required by law and only approximately 16% of the services provided are discretionary additional items that are non-regulated. Some of these non-regulated items that would be proposed for reductions include the Village’s River Hills review magazine and maintaining the Village website and e-mail mailing. This would negatively impact public communication and transparency, which is not healthy for government. With the number of services that are legally required, options for eliminating or reducing services are limited. Ultimately, all of the legally required services would still need to be performed, but with one less employee. The current administrative workload is such that one person cannot solely run the department.
EFFORTS THE VILLAGE BOARD HAS TAKEN TO REDUCE COSTS AND INCREASE EFFICIENCIES
Following is a brief list of some of the efforts already taken by the Village over the last few years to reduce costs and increase operational efficiencies:
- During the past 10 years, the Village has been fiscally responsible to minimize tax increases.
- Public Safety has been a priority (see Comp Plan Update 2019)
- Combined Village Manager, Village Clerk, and Village Treasurer positions in 2012, resulting in ongoing salary and benefit savings of more than $200,000 per year.
- Contract for Fire/EMS, Health Department and Library services with other North Shore communities.
- Worked with three other communities to continue the shared North Shore Library rather than become a contributing community with the Milwaukee County Federated Library System, a savings of more than $30,000 per year
- Contracting out for Building inspection services in 2018
- Contracting out for Attorney, Engineering, Assessment and Animal control services.
- Contract for Dispatch Communications from Bayside.
- Annually solicit health, dental and vision insurance quotes to ensure competitive pricing.
- Converted to paperless accounting system in 2021.
IMPACT ON TAXES IF REFERENDUM PASSES
If the referendum passes, the impact on the tax rate for the 2023 budget year would be approximately 57-cents per $1,000 of property value ($57.23 per $100,000 of assessed property value). The chart below demonstrates the annual impact that a passed referendum would have on property owners based on various property values.
|Equalized Property Value|
DEPARTMENT OF REVENUE SHOWS MINIMAL GROWTH IN NET NEW CONSTRUCTION
The Wisconsin Department of Revenue released a new report at the beginning of August illustrating how minimal new construction growth has been for most communities across Wisconsin. The net new construction numbers demonstrate that while inflation is higher than 8 percent, most communities will be limited to approximately a 1 percent increase in a local community’s ability to provide police, fire, and other critical local services to local communities. (report)
The League is urging the state to recommit itself to its historic partnership in support of local services because our current system that is tied to net new construction is a recipe for economic disaster for Wisconsin’s local communities.
In a Waunakee Tribune news report, League of Wisconsin Municipalities Deputy Director, Curt Witynski, calls the levy limits a growing concern among municipalities, particularly slow-growth or no-growth communities.
PURPOSE OF EXCEEDING THE LEVY LIMIT
As stated in the referendum question, the purpose of exceeding the levy limit is to maintain existing public service levels for police, public works, general government, general fund capital improvements and capital purchases. This also includes maintaining the level of service for those that we contract out which includes: attorney, assessor, auditor, building inspector, dispatch, engineer, fire and rescue, health department, library, and MADACC (animal control). In 2022, contract service costs are 25% of the general budget; wages and benefits of the current 25 employees in 2022 is 56% of the general budget.
As recently as the 2021 budget, the Village found itself $220,000 over budget. The Village was able to reduce that number to $121,084 in the 2022 budget; however, the budget was not balanced and the Village used our unassigned fund balance (reserves) to offset that amount. The State currently limits the amount that a Village can increase their budget to net new construction or 0%. The net new construction for the Village in 2021 was 0.324% or $8,261.61. The net new construction for the Village in 2022 was 0.787% or $20,197. This is the amount that the Village can increase their budget.
At the end of 2021, the Village’s reserves were at 28% of our annual operating revenues and estimated to be reduced to 25% to offset the 2023 budget. The Village Board established a Fund Balance Policy which limits the fund balance to between 15% and 25% of annual operating revenues. Further decreasing the Village’s reserve funds would not be fiscally prudent and may jeopardize the Village’s current high-quality Moody’s credit rating of Aa2.
The Village is at the point where it must balance the budget without relying on its reserves. This can be accomplished by decreasing expenses and/or increasing tax revenue beyond the Village’s levy limit. The Village is only permitted to exceed its levy limit if approved by the majority of the voters in a referendum.
- The current Consumer Price Index for All Consumers (CPI-U) through June 2022 for the Midwest United States for Class B/C cities is 9.7%. The index increased 3.2% from April to June and 1.6% from May to June. The Index for Chicago-Naperville-Elgin, IL-IN-WI increased 9.4%. This index increased 3.5% from April to June and 1.7% from May to June.
- The proposed development on Brown Deer Road is anticipated to start in 2023 and is estimated to add $40 million to the Village’s tax base. Property values are based on what is in place as of January 1 of each year. At this point, our advisor believes that the Village should begin to see increment from the development starting in 2023 with development completed for the 2029 valuation. The Village should see an adjustment to the tax base over a period of seven years once development commences. Not only will the tax base increase, but the net new construction figures should also increase.
- The Republican National Committee (RNC) has designated Milwaukee for their 2024 Conference. Two officers from River Hills are assigned to the mobile field force as well as Milwaukee City and County are requesting assistance from all of the surrounding communities. This could also entail additional events and campaign stops in River Hills as this is a hotly contested state. Estimates for police overtime services during that time period are estimated at approximately $20,000 or more in addition to what is normally budgeted.
CONSEQUENCES OF A FAILED REFERENDUM
If the referendum fails, the Village will be forced to balance its budget exclusively through cuts in spending or exploring other revenue generating alternatives. Cuts in spending will translate into a decrease in the level of public services provided by the Village. Given the makeup of the Village’s budget, reductions in non-labor costs would not produce an adequate decrease in the structural deficit. This will require staffing layoffs. The current draft budget proposed by the Village Manager in the event of a failed referendum includes the elimination of one (1) police officer position, and one (1) public works position and the elimination of those positions will address the shortfall in 2023 only.
VOTING FOR NOVEMBER 8, 2022
- Mail-in absentee voting will begin on September 22, 2022
- In-person absentee voting will be available at Village Hall from October 25, 2022 through November 4, 2022 – from 9:00am to 5:00pm
- Polls will open on Election Day, Tuesday, November 8, 2022 from 7:00am to 8:00pm at Village Hall, 7650 N. Pheasant Lane
FREQUENTLY ASKED QUESTIONS
- How did we get to this point?
- Levy Limit history compared to Net New Construction and Cost of Living Increases
- What is Net New Construction?
- What is a Levy Limit?
- Why do we need a Referendum to raise the Tax Levy Limit?
- Exceptions from Levy limits
- What is Expenditure Restraint?
- History of State Funding – League of Wis. Municipalities
- Comparing State and Municipal Revenue Sources – League of Wis. Municipalities
- Why not just charge a Fee or extra charge per property?
- Can the required Levy reduction for the Creation of a New Fee be overriden?
- What other alternatives are being considered for funding?
- What does it mean if the Referendum fails?
- Can the Village borrow to add to the levy?
- Where/when does the development on Brown Deer Road assist the Village?