If you live in the City of River Falls and have a home that’s worth $200,000, you can expect your 2021 property tax bill from the city to be around $1,403, with dollar values adjusted according to one’s individual property assessment. In a budget workshop held Tuesday October 13 prior to the council meeting, River Falls City Administrator Scot Simpson said the city tax levy was projected for a net rate of zero once balanced against the rise in net new construction citywide. Raise one, lower the other. Net rate increase overall? A flat zero. Or was it?

“We get out in public and people say, ‘my taxes went up! my taxes went up!’ What are you doing?” Alderman Scott Morrissette said during the Tuesday October 13 budget workshop on Cisco WebEx. “And then you get their bill and you show it to them and it’s not typically us that’s been the big increaser,” he finished out his defense of the council.

Alderman Morrissette’s comments came in response to a question he posed to City Administrator Scot Simpson regarding CVTC and other area tax levy influencers such as the school district, all with an impact of their own upon public spending. Simpson said that the city portion only accounted for 30 percent of local taxes, leaving out the other 70 percent determined by other governmental bodies. A net rate of zero percent for River Falls government, in other words, might not be a net zero across the board, in other words.

The flat increase on the part of the City of River Falls is projected to come after an adjustment is made for the rise in net new construction in River Falls. At the virtual budget workshop Tuesday, River Falls Council members were treated to a budget preview by City Administrator Scot Simpson.

“This evening we’re going to go through the 2020 projected results to give you some context about how we’re kind of gliding into the fiscal year,” Simpson told the city council. “A reminder about our fiscal planning and how we implement the bigger picture fiscal planning for the City.”

First though, Simpson gave the background.

“So starting with 2020, a little bit of discussion on that,” he said. “We had a kind of low range of the initial estimate is what we’re heading into, Simpson reported to the Council for COVID-monetary costs to date. Emerging in fall 2019 before being confirmed as present in Madison on February 5, the novel coronavirus has cost the City of River Falls $331,000 so far, with a projected $257,000 of this covered by Federal CARES fund money. City staff had given the council estimates in April and May, Simpson said, which had been overstated—at least so far.

“We’re ending up on the lower end of the initial estimate, I’d say,” Simpson said. “In a good way.” That said, the year wasn’t over and there were still more expenses to be tallied before the end of the deadly virus’ monetary costs.

“Obviously there’s many months of this left to go,” he said. “We’re not expecting to be done with this October 14 or 15.” With the closing of the school district and university there had been revenue reduction for the city, while building permits had come in significantly higher—by $100,000—than were projected.

“They aren’t necessarily higher than they’ve been historically but we were conservative with our budget numbers,” Simpson said. Among the COVID-specific modifications have been building changes and adjustments in technology, along with hand sanitizers and paper towels “For the most part, the CARES funding and the building permits should put us in pretty good standing,” he said of River Falls city finances. “Understanding,” he clarified, “that all of these revenues do not match expenditure funds.” A lot of the extra expenditures were in the City’s enterprise funds, but the city staff wasn’t proposing to mix and match where money was directed.

“There’s different impacts in different funds,” he said of the city’s financial position.

At the same time there was good news for city taxpayers: no need to dip into the fund balance piggy bank surplus that the city had, as staff had identified approximately $580,000 in general fund expense reductions.

“We made some decision in the beginning of this that have panned out so to speak,” Simpson said of belt tightening made at the beginning of the pandemic.

These included a City-wide hiring Freeze (excluding EMS service); reduced road maintenance costs; re-evaluating and halting of some capital projects by the City; and restricted spending elsewhere, including advertising and printing, professional services, travel, training and meals, and supplies expenditures.

“That’s over a half-million in expenditure reduction,” Simpson said, saying that the City had set aside money to use from its fund balance and that not needing it had put River Falls in a good place financially. Still, there were impacts to the revenue side from COVID.

“Don’t want to over-emphasize this but certainly we had a drop of revenue from customers, so we did implement some of those same measures,” Simpson said of city cost cutting. “The only one I’d be concerned about as far as an operating cost is electric,” he said, saying the only way to offset this would have included layoffs of city staff, “which didn’t make sense, given the amount of development we’ve had.”

Shifting from the summary into the Strategic Report, Simpson said that the City staff was expecting a financial recession (defined as two quarters of negative growth) in 2021. The magnitude of the expected recession was uncertain, but thought to be more severe than 2020 as aide payments dwindled. Some business sectors like development seemed to be doing well, but Simpson and city staff weren’t taking this as an indicator across the board. And then there was external government aid.

“We’re just assuming that our partners, the state, aren’t going to be able to be as generous as they have been in the past. There might not be a package from the federal government that has any impact on the city government directly and may not necessarily impact our city residents and businesses that allows them to continue spending as they have been,” Simpson said of things looking forward.

“We just looked at our books and what we have on hand and thought, ‘maybe it’s not going to be as good as we thought it would be,’” he said of the City’s finances. “And remember, even though our fiscal plan is considered conservative…we don’t want to rely on that going into the future.”

Slides presented to the River Falls City Council at a budget workshop.