Oneida County board makes good on passing tax-increase budget

News analysis

Without an amendment, at least not a successful one, and without a discouraging word, at least not many of them, the Oneida County Board of Supervisors unanimously approved Tuesday a 2024 budget that will raise taxes by 5 percent.

The county gave its nod to a budget that will increase property tax collections to $19.08 million, about $861,000 more than last year’s levy of $18.22 million. The levy includes more than $2.5 million for countywide EMS and $875,000 for bridge aids.

The budget process began in July and ran through budget hearings in early October. Along the way, the county modified overall budget requests by $1.4 million, including $785,000 in spending reductions and $615,000 in additions for estimated revenues.

Overall, the 2024 budget is in the neighborhood of $67 million, with a general fund operating budget of about $32 million and a $4 million capital improvement plan. It also includes more than $1 million in highway construction projects.

Board of Supervisors chairman Scott Holewinski continued this year to put his imprint on the county budget, stressing that it balanced without using any excess fund balances or rainy day funds. Also, in 2024, Holewinski said, the county will be initiating projects through the state DOT Surface Transportation Program and local bridge program. 

“Over a three-year period, the county will benefit from improvements exceeding $6 million in value with one local match at just over $1 million,” Holewinski told fellow supervisors in his budget report. “The American Rescue Plan Act (ARPA) relief funds account for $6.9 million in projects which began in 2022 and will continue into 2024. In 2024 we’ll be using ARPA dollars to replace tow trucks and will continue upgrading our information systems for improved security and enhanced business efficiencies.”

Holewinski cited a multitude of what he called positive aspects about the budget — the tax hike not being one mentioned — including robust revenues and an increased countywide equalized property valuation of 22 percent. Sales tax and building permit revenues continue to cruise along, meeting historic trends, Holewinski told supervisors.

“The use of ARPA and other federal funds has greatly benefited Oneida County and our capital projects over the years,” he said.

But there were challenges ahead, Holewinski said, and he pinpointed his concerns as well as his vision for the future. 

“As an organization we need to prepare for when the economy slows down and the federal funds run out,” he said. “Personnel costs account for 46 percent of the total of $67 million budget. Retention and recruitment are current challenges we have and we don’t see the challenge changing.”

Holewinski highlighted the 2024 budget’s cost of living adjustment of 6.26 percent, a raise Holewinski said was consistent with the Wisconsin Employment Relations Commission guidelines and needed to keep up with the market. On top of that, Holewinski, said, more than half of county employees will get an additional 2.5 percent step increase.

Holewinski came armed with numbers to depict the steep incline of personnel costs in recent years. For example, Holewinski said, in 2021, wage and benefit increases grew by $176,000 more than the allowable increase in the levy limit, and the gap has been growing since.

“In 2023, we initiated taking all employees from 1,950 work hours to 2,080 work hours,” he said [many were already at the higher level]. “Our budget increased $2,260,000 with the levy limit of only $177,000, so now we had to find $2 million in that year’s budget, and in the proposed 2024 budget we’re going up to $30,550,000 wages and benefits. That’s a $3,250,000 increase in wages and benefits, and our total levy limit is $189,000.”

So somewhere in the budget, Holewinski says, the board had to come up with $3 million.

“Every year moving forward we have to find an extra $6 million now in our existing revenues to cover employee wages and benefits above the levy limit and also future cost-of-living adjustments,” he said.

A host of challenges

Holewinski said the personnel costs raise many issues.

“The concern would be what happens if we lose jail revenue, interest income goes down, or stumpage and zoning permits decline,” he said. “We need to plan for that type of thing.”

And there are other personnel issues on the horizon, Holewinski said.

“In 2026, the deputy union contract, which was made for four years, 2022 through 2025, will ultimately reflect the increases we’ve given the non-union workers over the past few years,” he said. “And on that same thing, basically the deputies get two raises in a year, one of 2 percent at one point and six months later 1.5 percent, which comes out to about a 2.52 percent raise. And as you can see when you give the non-union workers 6.26 percent, there’s going to be a catch up in 2026 and 27. It’s something to look forward to.”

The bottom is, Holewinski said, county leadership needs to work on a long-term plan for workforce affordability. 

“In 2023, this county board increased all employees that were on 1,950 hours a year to 2,080 hours a year with the intent to reduce personnel moving forward and comply with federal labor laws, and we approximately added 8,900 hours to staff at a cost of about $278,000,” he said.

But if the intent was to increase hours to reduce personnel, Holewinski said, it hadn’t worked.

“As of today, only one position has been eliminated and that was in the clerk of court’s office,” he said. “Note that staff that remained had their wages increased for the savings, so it wasn’t a full position savings. Departments were to work together to justify the additional hours that were increased.”

Holewinski also zeroed in on the Human Service Center (HSC), which he said had boosted its own coffers while cutting services. The county is ending its contract with the HSC at the end of 2024.

“The Human Services Center has been receiving $1.8 million in tax levy annually from Oneida and Forest and Vilas counties for years,” he said. “They have grown their fund balances and tin cans to more than $5 million, with an annual operating budget of $10 million to $11 million annually with grants. They have been eliminating certain services, which places added burdens on the sheriff’s office and Social Services Department.”

Because of the high surplus balance, and because the county will be ending its contract at the end of next year, Holewinski said the county will not be adding new HSC funding for 2024. Instead a reduced budget allocation of $801,516 will be moved to the county’s contingency fund. In other words, should there be some unforeseen need for the money to provide mandated services, the county has the budget allocation set aside in its contingency coffers.

“The contract with the Human Services Center is from the late 1980s and it is time to determine how the county can provide client services in the most effective and efficient way possible,” he said.

Finally, beyond the reorganization of delivery of services now provided by the HSC, Holewinski is also looking at a broader reorganization of county government. A consultant has offered a menu of options and analysis, which the administration committee will consider before presenting a set of options to the full county board early next year, and the budget includes funds for any possible restructuring, including the possibility of hiring a county administrator or administrative coordinator.

“We had done a strengths-and-weaknesses opportunity-and-threats analysis regarding our current management structure at my direction,” he said. “A seed amount of $200,000 has been included in the contingency budget for 2024 so we have the time and resources to make any changes moving forward. As a board, we need to determine if the best path forward is creating a county administrator or making modifications to the administrative coordinator position that already exists.”

Holewinski said the budget offered opportunities, but he also said the county needed to keep its eye on what it is supposed to be doing and not doing.

“Even though the budget seems to be a sound budget proposal, based on the highlights and challenges for the new year that I presented earlier, we can pass it today knowing there will be big challenges for future county boards to address, but we can start that process today and address what our core services are that the taxpayers require and eliminate non-core services, which will reduce the number of employees and benefits.”

Ultimately, the board took the former path, rejecting one Holewinski amendment to eliminate funding for the sheriff’s department’s dive team; on a vote to add a full-time technical support position for the sheriff’s department, Holewinski voted against the measure, one of only a few supervisors to do so.

Wages and more wages

None of which is to say there isn’t concern on the board about the ongoing rise in wages.

For instance, supervisor Jim Winkler said he had made inquiries around the area and the proposed 6.26-percent wage increase for employees seemed much higher than those occurring in the private sector.

“The past several days, I’ve been making some phone calls into the community to different businesses, but the average rate of increase in the county, from what I’ve been hearing and what I’ve been asking of CEOs, is somewhere between 2 percent and 4 percent, about a 3-percent average. And I know the budget is 6.26 percent and I’m just thinking, and I know we have employees that are very valuable, I understand that, but I just question, can we continue to run at a 6-percent rate increase when much of our community is falling behind that?”

Supervisor Billy Fried agreed, but he said now was not the time to pull back on cost-of-living increases.

“The perception out there when you look at the numbers here, the last two years of Oneida County may exceed dramatically in some cases to what you see elsewhere,” he said. “It’s something I think we fought, or I should say debated, about two years ago at the budget process. And we’ve kind of been under this dome of trying to retain and attract people. And it’s been important to kind of stay on pattern with the CPI [consumer price index] number we’ve used.”

Fried acknowledged that it had worked to the employees’ advantage over the last few years, but he said the pendulum would swing.

“I expect over a cycle of time, it’ll probably be to their disadvantage,” he said. “But the bottom line is, at the end of the day, if we can’t afford it, we can’t afford it. I’m happy to say we got a budget here where we’re able to offer, I think, a very fair package to our employees to hopefully retain and attract new people here.”

Next year is a different question, Fried said.

“Can we do it next year? I don’t know,” he said. “Scott‘s outlined a lot of challenges that are snowballing a little bit. And I expect there are some other things we might have to look at when we find that we don’t have the monies to do it. But I think in this climate I can defend it to our constituents because we are fighting to retain people. And my perception is, there’s just more and more demand on our services here. So it’s a strange time, but I don’t think now would be a good time to question it.”

The county board agreed and approved the compensation increase.

As for the overall budget, there wasn’t much discussion and little disagreement. Holewinski did explain why the county was sticking more than $800,000 in tax levy into the contingency fund rather than providing the HSC with any levy next year, as it normally does. 

“The Human Service Center is sitting on over $5 million excess money, which basically is the counties’ money,” he said. “So we decided that instead of funding the additional 2024 fund that they would use some of that excess money to cover what we would have given, but we also did put that money in contingency because of the possibility we might need it .”

Finance director Tina Smigielski explained it as a bit of housekeeping “so that the funding can still be in the budget but in contingency versus as a grant directly to HSC.”

Holewinski did make a motion to eliminate $22,780 for the sheriff’s department’s dive team, but that was resoundingly rejected 15-3.

Supervisor Steven Schreier objected vociferously. While the dive team has never saved a life, it is used for search and recovery and without it Schreier said those who have lost family members and friends are left with grim options.

“Uncomfortable as it is to put that thought into people’s heads, but without a dive team you need to recognize what that option is for finding people who drowned,” Schreier said. “So you’re telling your constituents’ families if that event, that tragic event, should ever happen, we’re just going fishing. That’s why amongst many other things we have this service and there is no way in the world I would ever support reducing this from our budget.” 

Supervisor Tony Rio agreed, saying there were other places to talk about cutting.

“I mean if we want to start talking about cuts, that’s fine,” Rio said. “Let’s start talking about a planning and development office in Minocqua. Let’s start talking about what Ted (Cushing) mentioned about Minocqua dispatch.”

Fried also said the cut — and others like it — should, can, and will be vetted.

“Dive team, UW-Extension, so on and so forth over the years I have heard being mentioned and I actually have inquired on some of these things during the budget hearings,” he said. “Unless there’s really good strong reasons to make decisions here today without them being properly vetted, it is — we have a good budget here. We really do. We built in more money in the contingency than we ever have. We have a lot of things that are in flux and that’s why I probably — more than at any time I’ve been on this board — feel comfortable going into a year with a budget that not only meets the needs as requested by your committees but also has some wiggle room for some of the challenges that we know are coming in 2024.”

Fried said he understood where the motion was coming from but opposed it. Fried also said he would be making some proposals for changes in the budgeting process.

For example, he said he will propose having the administration committee present budget numbers to individual departments with instructions for them to meet that budget number, as opposed to always having the agencies presenting wishlists and the administration committee spending days picking through them.

There was more.

“I have a motion to ask for the finance director to provide quarterly reports of the county’s budget, a summary report of the county’s budget to us so we can track it not only as a whole, but you can keep an eye on it as you’re going through things with your committee so that next year we can come with a well-vetted budget for everyone,” he said.

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.