The City of Prescott Finance Committee met last week during its annual budget workshop. The Committee decided that we move forward with consideration of a 9.6% increase to the City’s tax levy and that we file an application with the Wisconsin Public Service Commission for a 4.5% simplified water rate increase. These increases would help alleviate costs in 2023. In total this would result in a total levy for the City of $2,561,610 and an increase in water rates of $2.39 per quarter.
How was this decision made?
First, 2022 saw an unprecedented year of inflation. As a result, there are several expenses that have gone up that include gas, electricity, supplies and materials.
Second, The City is undergoing a comprehensive plan for 2023-2030 and has identified several capital projects that include the reconstruction of Locust Street (proposed 2023), and Elm/Washington Streets (proposed 2024). Future projects such as mill and overlay of Monroe Street, Linden Road, Court Street and Orrin Road with sidewalk, along with the purchase of a new fire truck pumper replacement are also included in the proposed plan. To accomplish these projects plus keep up with inflation the City will need to increase debt service by $84,000 annually.
Third, an important asset to the City are the employees doing the day to day work. Prescott wants to remain competitive with surrounding communities that are of like size in population. With that being said, the City is working to bring our employees to market rate through wage adjustments that keeps us competitive and retains our excellent employees. This includes a new contract with our Police Department. Across the board, this wage increase is currently projected at an average of 6.3%.
Additionally, the State of Wisconsin has an expenditure restraint program for all municipalities. This program is an unrestricted aid program to qualifying municipalities that limit growth in spending. For the City of Prescott this year that number is 9.6%. The State of Wisconsin Department of Revenue sets this number based on inflation and net new construction for each municipality within the State. If you want more information on the program, it can be found here: https://www.revenue.wi.gov/DORReports/erp.pdf
Finally, The City of Prescott’s water fund is currently operating at a net position of $3,277 for 2023. The City is currently in the process of Well #3 remediation due to high nitrates. Additionally, the street reconstruction projects of Locust and Elm have water costs that are currently estimated at $1,294,140. The water fund is currently in need of additional funding noting that there has been no full water rate study completed in the City since prior to 1997. The simplified rate increase would affect the average water bill by $2.39 per quarter or $9.56 per year.
How will this affect your property taxes?
Current estimates are that for the 2023 tax year a property owner with a home value of $350,000 would see a proposed increase of $109 for the year or $9.08 per month, or for a value of $250,000 a property owner would see a proposed increase of $78 for the year or $6.50 per month. However, these estimates are based on assessed valuation submitted to the Wisconsin Department of Revenue that won’t be formally released by the Department of Revenue until the end of October.
The Council has approved a resolution to move forward with a 4.5% simplified water rate increase. However, formal application to the Wisconsin Public Service Commission will not occur until the week of November 14th. The City of Prescott will post a public notice as required by Wisconsin State Statute and will hold a public hearing for the budget approval at the November 28th, 2022, meeting.