State Projections Show Waukesha Facing $1.465M in Reductions

Waukesha has a $1.465 million budget gap to address under revised state aid measures given to the city late Tuesday, said City Administrator Lori Luther.

The projected reductions in funding come in $850,258 in state shared revenue, $200,000 in recycling and $414,292 in transportation aids.

“We are still not certain about transit aids and as we get additional information, I will certainly provide that to you,” Luther told the Common Council.

The projected reduction in state aid is a 50 percent reduction from what it received for the 2011 budget.

“I will point out that the city of Waukesha is being disproportionally hard with the formula that is being used,” Luther said. “Other cities are not losing as significant a percentage in shared revenues and transportation aid."

The newly revised figures show that some area communities are facing the same percentage of reductions as Waukesha. However, no communities in Waukesha, Milwaukee and Racine counties are facing a greater loss in percentage of state aid figures

The state budget includes language that indicates there is a belief at the state level that larger communities with higher assessed values “might have the capacity to absorb the cuts,” Luther said.

Luther estimated two weeks ago that the city would face a $1.5 million loss in state funding.

Luther said the hiring freeze that was extended two weeks ago to include sworn police officers and firefighters remains in effect.

The city’s budget process will begin much earlier than normal, Luther said, as the city looks for ways to address the cuts without raising property taxes. The proposed state budget indicates municipalities are to not raise the tax levy unless there is a directly proportional amount of new development in the city.

The city has already informed its non-union employees that they will have to start contributing to their pension plans under the budget repair law.

“I am comfortable with the fact that staff will be able to bring forward options to the council to consider,” Luther said. “Clearly as additional information becomes available, that information will be distributed as quickly as possible. So at this point and time, we are sitting on a $1.5 million loss.”

Meanwhile, Finance Committee Chairman Joe Pieper asked during the meeting for city staff to provide a presentation to the Finance Committee on how the budget repair law will affect the city.

The Legislative Fiscal Bureau used 2009 payroll data to determine how much the city could potentially save by having non-protective service employees contribute 5.8 percent into the Wisconsin Retirement System, which was approved in the budget repair law. Rough estimates show that $1.211 million could potentially be saved in Waukesha through the employee contributions, according to a document released Tuesday.

However, a memo from Director of Human Resources Donna Whalen states that city union employees contract does not expire until Dec. 31, 2012. Non-union employees will begin contributing toward the retirement benefits when the law goes into affect later this year.

“Therefore, no changes will occur in these unites during that period of time as the city is legally required to honor these agreements,” Whalen said in the memo.