1. Two Rivers: Small City Perspective on State-Local Finance
Greg Buckley, Two Rivers City Manager
Urban Alliance Policy Forum, Madison
June 8, 2017

2. Two Rivers: Small City Perspective on State-Local Finance
Two Rivers is a small, full-service city of 11,700
Located on the shore of Lake Michigan in Manitowoc County
About 90 mi. north of Milwaukee
Two Rivers

3. Two Rivers: Small City Perspective on State-Local Finance
Commercial Fishing History
Birthplace of the Ice Cream Sundae

4. Two Rivers: Small City Perspective on State-Local Finance
Early Industries Grew Up Along Our River Corridors

5. Two Rivers: Small City Perspective on State-Local Finance

6. Two Rivers: Small City Perspective on State-Local Finance
One of those early woodworking industries—Hamilton Mfg.—grew to be the City’s dominant employer, with over 2,000 employees at its peak and a 1.2 million SF complex that sprawled over the City’s waterfront

7. Two Rivers: Small City Perspective on State-Local Finance
After 130 years of operation, Hamilton closed in

8. Two Rivers: Small City Perspective on State-Local Finance

9. Two Rivers: Small City Perspective on State-Local Finance
Two Rivers is now focused on “Turning Our Face Back to the Water,” to capitalize on the enormous resources of our river corridors and Lake Michigan.

10. Two Rivers: Small City Perspective on State-Local Finance

11. Two Rivers: Small City Perspective on State-Local Finance

12. Two Rivers: Small City Perspective on State-Local Finance

13. Two Rivers: Small City Perspective on State-Local Finance
We have a great beach, too

14. Two Rivers: Small City Perspective on State-Local Finance
But, from a municipal finance perspective,
recent history has been no “day at the
beach.”
--From 2009 to 2014, the City’s equalized valuation
dropped by 14 percent (rebounded by 2 percent in 2015)
--City has been challenged to maintain quality services and continue to reinvest in infrastructure, while undergoing major economic changes

15. Two Rivers: Small City Perspective on State-Local Finance
Police Department Budget, at $2.8 million, is 28.6% of GF Budget

16. Two Rivers: Small City Perspective on State-Local Finance
Fire and EMS Budget, at $2.2 million, is 22.5% of GF Budget

17. Two Rivers: Small City Perspective on State-Local Finance
In the remaining 50% of the GF Budget, we strive to provide all other City services

18. Two Rivers: Small City Perspective on State-Local Finance
Two Rivers’ Operating Budget Has Been
Flat-Lined for a Decade:
2007 General Fund Budget: $9,661,981
2017 General Fund Budget $9,824,443
Change Over 10 Years: $ 162,452 %

19. Two Rivers: Small City Perspective on State-Local Finance
We have done a lot to hold the line on
spending:
--Changes to employee health insurance--increased
employee premium co-pays, high deductible plan
with HSA, wellness iniatives, have kept annual
cost increases under 3 percent, on average
--Benefitted from the “tools” provided by Act 10 and related
legislation
--Eliminated 13 FT positions, reducing workforce 10 percent, from
125 to 112, with no significant service impacts

20. Two Rivers: Small City Perspective on State-Local Finance
State Funding has actually declined:
2007 State Funding $4,806,015
2017 State Funding $4,660,650
Change Over 10 Years: $ 145,365
-3.02%

21. Two Rivers: Small City Perspective on State-Local Finance
We’re one of those cities that is highly
dependent on Shared Revenues; at
$3.8 million, they account for 38 percent
of our General Fund Budget
Add in Expenditure Restraint and Road
Aids, and State-source revenues fund
48 percent of that operating budget

22. Two Rivers: Small City Perspective on State-Local Finance
Even with no increase in GF spending,
the City has needed to increase its
operating levy by 30 percent just to maintain
a static spending level:
2007 General Fund Levy $1,562,998
2017 General Fund Levy $2,032,303
Change Over 10 Years: $ 469,305 %

23. Two Rivers: Small City Perspective on State-Local Finance
What do we need?
Greater flexibility to implement local user fees and charges to help finance municipal services. Problem is, we’re getting
less flexibility
State Budget provision added to levy limits
calculation any new user fees, for services previously
funded through the tax levy
--Further constrained local flexibility to generate
needed revenues
--Created inequities among WI’s cities and villages
--Recent Assembly GOP proposal on Wheel Tax would further limit
local flexibility

24. Two Rivers: Small City Perspective on State-Local Finance
What do we need?
Greater flexibility to raise local tax rates
--Get rid of levy caps for operating levies altogether
--Or at at least:
--Allow carrying forward “unused” levy
capacity from year to year:
--Continue to allow increases in operating levy
if debt service levy for pre-2005 issues
declines, or to offset ANY declines in debt service

25. Two Rivers: Small City Perspective on State-Local Finance
What do we need?
Re-affirmation of the Wisconsin’s historic commitment to using statewide revenue
sources to support vital local services and
infrastructure
A commitment that began in 1911, is still the foundation for funding local services in WI
cities and villages

26. Two Rivers: Small City Perspective on State-Local Finance
What do we need?
(cont’d) The League of Municipalities has advocated increasing funding for Shared Revenues in virtually every budget cycle in recent years
--Responding to the Kettl Commission
recommendations in 2001
--More recently, seeking in to “Restore
Shared Revenue Funding to 2002 Levels”
--Current session goal of increasing Shared
Revenues funding by same % as growth in GPR

27. Two Rivers: Small City Perspective on State-Local Finance
Conclusion: #1 Legislative goal should be a renewed
commitment to Shared Revenues
-- “First, Do No Harm” of all: maintain existing, historic
funding commitments in place since 2002
--Then, build on that base, with a logical formula tied to
GPR growth, regional economic growth, or other
factors

28. Two Rivers: Small City Perspective on State-Local Finance
Conclusion: #1 Legislative goal should be a renewed
commitment to Shared Revenues (cont’d)
Key to Any Changes:
--Recognition by State Government leaders that local
government is a PARTNER in providing vital public
services and infrastructure, in pursuing economic
development
--Respect for LOCAL CONTROL, even as local units seek
more funding support from State-level sources

29. Two Rivers: Small City Perspective on State-Local Finance