The village of Scotia is set to adopt an $8.6 million 2013-2014 budget that slightly exceeds the tax cap.
The Board of Trustees will hold a public hearing on Wednesday at 7 p.m. on the spending plan that would increase the tax levy by 3.2 percent — above the village’s limit of 2.5 percent.
If the budget is approved, which the trustees are scheduled to do following the hearing, the tax rate is projected to increase from $11.64 to $12.01 per $1,000 of assessed valuation. The average resident with a home assessed at $125,000 would see his village taxes increase about $55, to $1,501.
Mayor Kris Kastberg said this budget doesn’t cut any additional programs. “I think it’s a good budget,” he said. “It maintains the services.”
The tax cap didn’t allow for much of an increase in spending, according to Kastberg.
The village had to cut several items in its $8.4 million 2012-2013 budget. The current year’s spending plan eliminated all funding for Freedom Park and the teen program and half of the funding of the Memorial Day parade.
The three components of the budget are the general fund at $6.6 million, water fund at $758,000 and sewer fund at $1.15 million. Revenue for the water and sewer funds come from fees. Of the $6.6 million in the general fund, property taxes would fund close to $4.4 million. Other revenues such as mortgage fees and sales tax revenue make up the rest.
Among the biggest cost increases in the budget were pension costs and workers’ compensation expenses, Kastberg said.
Workers’ compensation is expected to go up between 16 and 19 percent, according to Village Clerk Maria Schmitz.
The village’s annual contribution to the pension fund this year was about $675,000 and its estimated contribution will be nearly $800,000 for the next budget, Schmitz said. The tax cap calculation allows municipalities to exclude a certain portion of their pension costs. Last year’s exclusion was $51,000, but this year’s was only $21,000, according to Schmitz.
Kastberg said the good news is that pension costs are expected to decrease a little bit next year. The state uses a five-year rolling average to calculate the percentage that municipalities must contribute to the pension fund. By next year, the stock market crash of 2008 will not be factored into the calculation.
Health insurance rates were flat, which Kastberg attributed to employees’ low use of health care and the wellness programs that the village instituted, including workshops on healthful eating, health clinics and exercise competitions.
The budget also taps $375,000 from the village’s surplus, which Kastberg said is more than it has ever done. This will leave Scotia with about $1 million to $1.1 million in the account.
“This will be the last year I’m comfortable with taking any money from the fund balance,” he said.
The village typically appropriates $300,000 from the fund balance to lower the tax levy and then the village puts that money back as it receives revenue. Because the budget was so tight, Kastberg said this was the first year the village did not replenish the funds it tapped.
In February, the Board of Trustees voted 3-2 to give itself the authority to exceed the cap. The board last year also voted to give itself the option of going over the cap but it did not ultimately do so.
Kastberg said Scotia is in pretty good shape financially — if it can get the pension costs under control.
“I think the village has weathered this economy pretty well,” he said.