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Dane County cuts back as revenue streams slow

Jessica Stephen
Special to The Daily Reporter

Shared revenue cutbacks and revenue shortfalls are giving Dane County’s budget a one-two punch that might only be shielded with layoffs, unpaid furloughs, wage freezes and delays in construction projects.

County officials project a $578,000 reduction in shared revenue coupled with a forecasted $5 million to $6 million shortage in budgeted revenue. That is forcing the county to aggressively seek ways to avoid a financial knock-out.

“It’s unprecedented, at least since the Rust Belt recession (in the early 1980s), to have all of those major revenues come in so far under budget and to have them fall so precipitously. That has not happened in our experience,” said Topf Wells, chief of staff for Dane County Executive Kathleen Falk, who has promised strict cuts to balance the county’s $493 million budget.

In memos sent to department leaders and elected officials in May, information attributed to Falk laid out the situation this way:

The county suffered a “serious drop” in county revenue, including money generated from sales tax, investment income, real estate fees, and building and erosion-control permits.

If those trends continue, according to the memos, the county likely will end the year with a $5 million to $6 million shortfall. That would include more than $2 million lost in expected sales tax revenue, another $2 million-plus in investment income, and about $1 million in fees and construction-related permits.

High unemployment, continuing job losses and battered retirement accounts, which have led people to stay in government jobs when they might otherwise have chosen retirement, also pinched the county’s finances.

Add to that the state’s own budgetary woes and the decision to withhold shared revenue and, according to information attributed to Falk in one of the memos, “we cannot find reasons for optimism.”

To stop the spiral, Falk has called on county department leaders to find ways to cut costs and increase revenue.

Large departments must submit budgets with a combined 6 percent expense decrease and revenue increase.

Smaller departments must find 3 percent. Administrators were warned cuts must be practical.

Falk’s goal is $8.2 million in savings.

She also extended a 16-week hiring freeze through the rest of the year to save $1 million to $2 million, Wells said.

Modified business hours are being considered. And unpaid furloughs are being negotiated with county labor groups.

How long employees could be on unpaid leave was unclear, although one labor leader said the number of days is increasing.

“It started at three days and now it’s at six,” said Scott Vaughn, executive director of the Building and Construction Trades Council of South Central Wisconsin.

The county also asked for a wage freeze, but union workers are due a contracted wage increase effective July 1, said Vaughn, who represents about 15 carpenters, electricians, steamfitters and painters, a fraction of the nearly 2,000 employees in unions.

So far, voluntary furloughs have proven more palatable than wage freezes, although no formal votes had been taken.

“The county is being very good,” Vaughn said. “They could just go and lay people off for a week. But the guys realize it’s (furloughs) or layoffs, so it’s a no-win situation.”

Outside the county’s staffing pool, many contractors are keeping an eye out for possible construction project delays, said Tom Fisher, president and business manager of the Wisconsin Laborers’ District Council, which represents more than 9,000 members.

“It’s always been that Dane County, in the past, was a bit isolated from these (situations),” he said. “This time around, there’s nobody who’s isolated. It’s statewide. It’s nationwide. And it’s worldwide.”

Fisher said he heard some projects will be put off.

In May, Dane County supervisors froze spending on $25 million in capital projects.

“Capital projects that we borrow for today increase the budget in following years,” according to information attributed to County Board Chairman Scott McDonell in a press release. “The Personnel and Finance Committee believed the only responsible course of action was to freeze spending for projects that are either not essential, or that can be delayed until next year.”

County supervisors expected to save about $3 million by delaying select projects, including restroom and other improvements at the Henry Vilas Zoo, several trail projects and a parking ramp renovation.

Wells said cutbacks or delays could be considered for other projects, although probably not until 2010.

However, he said, “There is a lot of construction-related work that is still going on. The capital projects that might be delayed are more in the areas of land acquisition, primarily for preservation, and equipment. Those are the areas where you will see delays and cutbacks.”

The continuing construction projects include the new Badger Prairie Health Care Center in Verona. The project could cost nearly $23 million. Recently submitted bids showed the possibility of perhaps $4 million in savings. Wells said the county wants to break ground on the project this year.

He said plans to remodel the county’s 911 center also are on track. And several highway projects, infused with federal stimulus money, are expected to move forward.

The county also is planning major construction, and possible revenue generation, with its food waste digester. The system has been described as a means of turning animal waste into electricity and gas.

“That’s an example of something that not only has really great environmental consequences, but it also has great energy consequences,” Wells said. “And it could be a great moneymaker.”

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