By Kevin Boneske
Staff Writer
ASHWAUBENON – With an anticipated general fund surplus of around $275,000 at the end of this year, the village board agreed Tuesday, Dec. 17, to designate $100,000 for replacing the Finance Department operating system with remaining excess funds being placed into the employee retirement fund.
Finance Director Greg Wenholz said the primary reasons the village is realizing a surplus are because of increased room tax revenue of about $90,000, another $90,000 in building permit revenues, $79,000 more in revised state shared taxes and an additional $50,000 in interest income.
“Those are all good positive variances,” he said. “What we like to do is reserve those (surplus funds) for a purpose.
The reason why is when you have any excess funds and just roll it over, and you think next year we can spend what we had extra last year, if you haven’t designated some sort of purpose, rating agencies and others will view that as overspending on your budget. They’ll view that negatively.”
Wenholz said the Finance Department’s existing general ledger system is due for an upgrade.
“That alone is going to cost about $75,000,” he said. “I know that’s very expensive. I’m recommending that we look at an alternative tool. The tool we have was not really designed for government.”
Wenholz said $100,000 would cover a new operating system for use now and into the future, while the overall annual maintenance costs would be reduced by approximately $20,000 per year.
“This tool almost pays for itself over five years,” he said.
Wenholz said it would take about 9-12 months to implement a new system.
Because of employee retirement fund being drawn down as village employees retire, Wenholz said the remainder of the surplus funds had been recommended for that purpose.
“We’re constantly looking to fund that,” he said. “We’ve used excess funds in the past for that.”
Wenholz said the board’s motion assigns funds for designated purposes, but if something would come up in the new year where funding was needed, a subsequent board action could reassign those funds.
“At least we have something in place by Dec. 31, and it’s a plan in place, that we can show our auditors and show other people,” he said.
Surplus for tax reduction?
During the board’s discussion on assigning the surplus funds, Trustee Mark Williams asked whether that money could be used to lower taxes in the village.
Wenholz said if surplus funds weren’t assigned to the employee retirement fund, tax money would have to be used instead.
“If we didn’t use the money for this now, we would have to pull future tax funds,” he said. “We’re not using it to buy things that we don’t need.”
Village President Mary Kardoskee said she has been an advocate for putting excess money in to the employee retirement fund, “because we do have some significant retirements coming up next year.”
“What we’ve got in there I don’t think will cover it,” she said. “We would have to raise taxes in the 2021 budget.”
Surplus for road resurfacing?
Trustee Gary Paul, who said the village’s road system is now better than the surrounding communities, suggested using some surplus funds for road resurfacing.
“I would like to see some of it, and I don’t have the dollar amount, but some of it put into the road fund, so we continue to have our streets upgraded and give the people the nice roads that we do have,” he said. “That’s where my concern is. I don’t want to see us get behind in that. By taking some of that money for next’s year’s project, I think would help that fund.”
Kardoskee said if additional funds would be needed next year for road resurfacing, of which $650,000 has been budgeted for 2020, the board could reassign that money from the employee retirement fund.
Public Works Director Doug Martin said surplus funds last year were assigned for road resurfacing in 2019.
“This year we did a little more (road resurfacing) because of that, because there were some additional funds that were shifted into that account,” he said.