By Adam Hocking
MARSHFIELD — The Marshfield Common Council began its budget hearings on Monday night and have at least one more meeting prior to publishing the budget and conducting a public hearing. That public hearing will be on Nov. 24.
Expenditure restraint program
The expenditure restraint program (ERP) is a state funding mechanism for cities that limit growth in spending. In 2015 Marshfield received about $400,000 in ERP funds, and City Administrator Steve Barg has said he would anticipate a similar amount coming in 2017. Limiting spending growth in the 2016 budget qualifies Marshfield for a 2017 ERP payment.
In determining which cities are eligible for ERP, the state looks at two factors: net new construction in a city and the consumer price index (CPI) — inflation. This year the CPI sits at 0.31 percent, which is considerably lower than in years past.
To meet the requirements for ERP funding, Marshfield has to considerably limit spending growth. In past years the city has had the opportunity to increase spending between 2-5.6 percent and still qualify for ERP. This year Marshfield must limit spending growth to a 1.01 percent increase to be eligible.
Ostensibly, it might seem straightforward to only modestly increase spending, but Barg said that the city has a number of costs — for example contracts for union employees — that may increase that the city cannot control. Technology and health insurance costs also make limiting spending growth difficult.
In order to qualify for the 2017 ERP payment, the city has gone through an extensive list of potential cuts proposed for the 2016 budget. On the surface it appears that about $835,000 from the proposed budget would be cut.
However, about $346,000 of that total will be transferred to other funds outside of the general budget fund, so the city will still be able to provide the services included in that dollar amount, but it will not count against its general budget fund total. Another $73,000 Barg said accounts for reallocating the payment of salaries to, in one example, the wastewater utility and not from the city’s general budget fund.
When considering the reallocation of about $419,000 out of the general budget fund, the actual proposed budget cuts for the 2016 budget come closer to $416,000.
The most painful cuts, Barg said, are the ones that relate to the city’s infrastructure. There is a proposed $25,000 cut for crack filling on streets and highways in Marshfield for the 2016 budget and a $40,000 cut proposed for bridge treatment. There is also a $50,000 cut proposed to the city’s snow and ice budget, though Barg pointed out that, that cut actually puts the budget for those services more in line with what is typically needed when looking at a 10-year average of the snow removal requirements.
There are also cuts for items that were proposed for the first time this year that the city deemed were not feasible considering the ERP limitations. For example, Marshfield police looked to add about $12,000 for body cameras, which they do not currently have, but that item was ultimately cut.
“It’s not unusual that … people will submit requests based on their best plans and what they’d like to see done. That doesn’t mean that the financial picture — when it all comes together — we can do everything,” said City Finance Director Keith Strey. “A lot of new things were proposed. Sometimes you just simply can’t afford it.”
Overview and a tax hike
The total proposed budget for 2016 sits at about $41.9 million with about $21 million of that being the city’s general budget fund. The general fund accounts for the day-to-day operations of the city, including items like street maintenance, police and fire services, wages and benefits, and much more. These items are largely financed by property tax funds. Capital projects such as the building of a new library and community center or the reconstruction of Maple Avenue fall outside of the general fund expenses.
The city’s property tax rate will increase from $9.02 per $1,000 of assessed home value to $9.07 per $1,000 of assessed value. This means on a $100,000 home, there would be $5 more collected in property taxes in 2016 compared to 2015. This tax increase, Strey said, would generate about another $90,000 for the city.
Barg said that from an overall standpoint, Marshfield is “in good shape” financially.