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Home My WebLink About25. Report on City Spending City of Oshkosh Finance Department 215 Church Ave.,PO Box 1130 Oshkosh,WI 54903-1130 (920)236-5005 (920)236-5039 FAX OIHKOIH ON THE WATER MEMORANDUM DATE: October 9, 2012 TO: Council Members FROM: Harold Buchholz, Chair Long Range Finance Committee RE: Comparison of City of Oshkosh Spending (By Function) to the Spending of Other WI Communities Background As requested by the Council, during the December of 2011 joint workshop between the Council and the Long Range Finance Committee, the Committee has been compiling and reviewing the spending of the City of Oshkosh compared to the spending of other similar WI Communities. The source of the data used to compile this report is the State Regulatory Report that all Wisconsin communities are required to complete and file with the Department of Revenue each year. As part of the filing, by July 31, each City's audit firm is required to submit a certification that the report ties out to the City's Annual Financial Report, which ensures that actual year-end numbers are used for reporting purposes and the totals for each community match that community's final audited numbers. However, it is important to note that there may be slight variations in the manner in which each community reports its local information as to the categories used to report the details. The communities selected for this analysis are those with populations closest to the population of Oshkosh, and are as follows: City 2010 Population Appleton 72,563 Waukesha 69,100 Eau Claire 66,149 Oshkosh 66,080 Janesville 63,600 West Allis 60,600 While population assures similar size, other attributes including: (1) residential / commercial / industrial mix, (2) whether the community hosts higher educational institutions, and (3) what kind of governmental institutions (County seat, prisons, state buildings, etc.) are located within the community, also play an important role in dictating comparability. Analysis This report summarizes and illustrates graphically the comparability between all of the 1 analyzed communities, however, the data used to compile the report is also available should you be interested in that level of detail. The key findings are detailed below: • Service Offerings and Delivery of Services —The types of services provided by the City of Oshkosh are very much in line with the types of services provided by other communities surveyed, and it appears that Oshkosh performs these services comparably to the other Communities. The following column chart shows all of the categories of services provided by all of the communities as well as the portion of each community's budget that was spent on each function in the fiscal year 2010. While there are some variations between communities, general spending is divided about the same from community to community. The biggest differences occur among Health Services (some communities have a city run health department and some do not) and Ambulance Services (same situation). The other main fluctuation is how different communities classify culture and education, park and recreation, and solid waste collection and disposal. Percent of General Fund Spending 2010 100.00x% r „l��l o� �1� �� 80.0010 a - 60.00% /40.00010 ` 20.00% 0.00% �_.�_ w_._�._ 1 ,. �:�:r...�.._�.........�....__.. �_._.�._.__._.____:o �_µ �.a._f" Eau Claire West Allis Janesville Waukesha Appleton Oshkosh ■general government I law enforcement fire a ambulance pt other public safety s highway maintenance&admin a highway construction ■road-related facilities other transportation I solid waste collection and disposal other sanitation 0 health and human services culture and education ,_; parks and rec conservation and development ' all other expenditures 2 Continuing on with the cost of services provided, the following line chart illustrates the amount that each of the communities spent, in total, on the services provided. With the exception of 2006, due to the large expenditure related to the construction of Pollock Pool, the City of Oshkosh is at or near the bottom, and continually well below the average of overall spending per community. Total General Fund Expenditures 2005 - 2010 $80,000,000.00 ._...__.... . ..._..._..... $75,000,000.00 —4—Eau Claire $70,000,000.00 *ay —111—West Ales Janesville $65,000,000.00 Waukesha Appleton $60,000,000.00 *-Oshkosh ----Average $55,000,000.00 550,000,000,00 2005 2006 2007 2008 2009 2010 I Taking into account the specific population of each of the communities, below is representation of the amount of each community's spending on a per capita basis. Again, the City of Oshkosh ranks at the bottom in every year except 2006, due to the large expenditure related to the construction of Pollock Pool, and is well below the average in each of the same years. General Fund Spending Per Capita 2005 - 2010 $1,250 00 $1,150.00 ..__ —4--Eau Claire #--West Allis 51,050 00 Janesv�tle $950.00 g —0—Waukesha Appleton S8 50,00 —41—Oshkosh Average $750,00 _.__....... 2005 2008 2007. 2008 2003 2010 3 • Tax Levy— The City of Oshkosh has a relatively low tax levy compared to other cities of the same size. As is illustrated by the bar chart below, the City of Oshkosh is again at or near the bottom as far as how much is levied in property taxes in each of the years analyzed, and is well below the average in every year. Property Taxes Levied 2005 - 2010 $55,000,000.00 • 550,000,000.00 ■Eau Claire $45,000,000.00 ■West Allis $40,000.000.00 , .._. _. _ _ Janesville 535,000,000.00 ■Waukesha Appleton $30.000,000.00 II Oshkosh 525,000,000.00 Average 520,000,000.00 ,. 2005 2006 2007 2008 2009 2010 Equalized Value - The equalized value for each community is the value of the community (sum of all property values) as it relates to all other communities across the state. As the chart below shows, the value of the City of Oshkosh is lower than all other communities surveyed in this analysis. The lower the value of City property, the higher the tax rate needs to be if the levy amount is the same as other communities. Equalized Values 2001 - 2010 $7,000,000,000.00 56,500,000,000.00 $6,000,000,000.00 _ . 55,500,000,000.00 .__. —6—Eau Claire 55,000,000,000.00 .E.._ —0—West Allis $4,500,000,000.00 ...0 —Janesville _Waukesha 54,000,000,000.00 ,. Appleton —0—Oshkosh $3,500,000,000.00 Average $3,000,000,000.00 . .._ $2,500,000,000.00 $2,000,000,000.00 _._.__ ..._.._._ 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 4 • Current Level of Debt—The City of Oshkosh carries a higher than average debt burden to an average Aa2 bond rated city. In 2012, the City is repaying $17,108,200; this includes $12,068,022 in principal and $5,040,178 in interest. As a point of reference, the City currently spends 26.43% of its entire General Fund Budget on Debt Service. However, because different cities use different methods to issue debt, both general obligation debt and revenue debt, it is difficult to compare the amount of outstanding debt from city to city. We do know though, that the City of Oshkosh has a past practice of issuing general obligation debt for its utility needs. This has elevated the City's debt usage and reduced the available capacity. The Committee will continue analyzing the City's debt picture and report findings to the Council in the future. Overall Committee Observations The Committee was able to draw the following observations from the analysis regarding the City of Oshkosh: • The City has a lower cost of service delivery than comparable communities, • The City has a lower tax levy than comparable communities, • The City has a smaller tax base than comparable communities, and • The City has a higher general obligation debt balance than comparable communities. As a result of this analysis, the Committee believes that the City needs to engage in the following: • Further evaluate the City's debt load and establish a policy to address the high debt burden, and implement a long term debt strategy, • Consider utilizing the City's taxing ability to ensure its long term financial health, • Continue to explore, and find a way to establish and fund a capital equipment replacement fund, and • Find ways to grow the City's tax base. This analysis and these recommendations reinforce the Long Range Finance Committee's current priority list that was established jointly by the Council and the Committee, as the priority list includes three out of the four action items noted above. To that end, the Committee will begin, with the Council's consent, working more in depth on the noted items. It is our expectation that the Council will find the information useful as it moves through the 2013 budget process and be able to use it, as well as the Committee's continued work products, to plan for the future. The entire Long Range Finance Committee would like to extend an offer to the Council to have a joint meeting to discuss this information further if the Council believes it would be beneficial. Otherwise, we are certainly available to respond to questions and provide any other assistance as requested. In addition, the Committee stands waiting to assist the Council with any requested research or information gathering in regard to the 2013 budget process or any other City finance related topic, and will continue working hard on the long-range financial issues of the City. 5