Well, our county is now reaping the reward for the past years of poor financial controls. We have been notified by Moody’s that Kewaunee County’s financial rating has been downgraded from A1 to A2 with a negative outlook. This rating was rendered based upon the county’s 2013 audited financial statements. The report focuses on the low cash and fund balances in a number of funds and the need for the General Fund to support those funds.
What does this mean to the county? Primarily, it means if we were required to borrow money now, it would be at a higher interest. Barring any unforeseen event, we do not see any reason we’d have to borrow any money for any projects in the foreseeable future.
For those of you who have been following my writings about our county, this probably does not surprise you as prior to the county board that was put in place in 2014, there was little or no action taken to hold management accountable.
I have been on the board for the past three years and the chairman for the past year. When I first was first elected to the board three years ago, I immediately began to attend the various committee meetings to include; Highway/Solid Waste, Finance, Human Services, etc. In each of those departments it was quite apparent there were few financial controls and they were not operating within their budgets. Worse yet, there was very little, if anything being done to change their direction.
There were a number of concerns that were recognized that required immediate attention. The major concerns are as follows:
· Substantial losses generated by Kewaunee County’s Highway Department and Landfill operations.
· Significant losses in the Human Services department.
· The potential loss of revenue due to the closure of the Kewaunee Power Station.
· Ever increasing costs for county employee health insurance.
· Salary increases for county employees that had averaged 3% a year for some 10 years in a row.
· The need to make interest and principle payments on projects carried out over the past decade that included the new Public Health building, remodeling/updating the County Courthouse, upgrades and expansions at the County Fairgrounds, etc.
· The need to update some county systems including telephone, scanners, etc.
· The need to replace some aging county vehicles that may soon require expensive maintenance.
· Limitations within the county’s financial reporting system resulting in delays or insufficient information to make good financial decisions.
· Increasingly complex financial reporting as required by State and Federal agencies.
· Steadily increasing tax burdens on the residents of Kewaunee County.
In the spring of 2014 we installed a new board, new committee chairs and we assigned board members to the various committees based upon their skills and experience versus how many years they had served on the board. Obviously the Finance and Public Property Committee was a major focus as that is where the spending direction is set for the county. The Finance and Public Property Committee now includes the following supervisors; Virginia Haske, John Mastilar, Tom Romdenne, Kenneth Tebon, with the Chairman being Lee Luft. That committee has done an exemplary job, in reigning in the spending and setting new direction for the county.
I requested Mr. Luft to provide me an overview of some of the steps that have been taken or are being implemented that will put our county back on track. The ultimate goal of course is to reestablish the solvency of our general fund, but additionally, continued streamlining the county organization and trim any expenses we can without cutting services to the county residents.
Through April, 2015, the Kewaunee County Board and the Kewaunee County Finance Committee have worked in concert to address the above concerns by:
- Hiring new department heads for both the Highway and Human Services departments with a mandate to bring costs in line with revenues. New department heads, Todd Every (Highway) and Greg Thousand (Human Services) are in place and are committed to balancing their budgets.
- Finance Committee members worked with Chairman Heuer and County Counsel, Jeff Wisnicky to formulate an agreement with Dominion to maintain the previous levels of revenue for the County after the decommisioning of the Kewaunee Power Station. This process is on-going.
- The Finance Committee met with county employees representing all departments to reach an understanding to require County employees to pay a greater share of their health care premiums and to pay higher co-payments to see specialists. These efforts reduced the County’s health care costs by just over $200,000 in the first year.
- Made the difficult decision not to proceed with Phase III expansion at the landfill. Remember this landfill was losing about $380K per year, and we need to make more decisions on the direction of that operation soon.
- Declined to add additional debt while continuing to pay down existing principle and interest.
- Found cost-effective options to replace the out-dated telephone systems and some of the aging auto/truck fleet used by County employees to carry out their required functions.
- Hired a new County Administrator, Scott Feldt, with excellent economic development and finance background.
- Hired a new, full time County Finance Director, Paul Kunesh (18 years of experience with Manitowoc County) to review the processes used in a number of departments with the goal of improving both the quality and timeliness of financial reporting.
- Reduced the county’s share of the tax burden for the first time in six years.
Clearly there is more to be done. The county needs to restore additional funds to some of the accounts that the county can draw upon during difficult financial times or under emergency situations. We will continue to aid all county departments such that they remain on budget. Restrict additional capital spending and pay down debt. All these steps will help the county return a more secure financial footing and regain our A1 credit rating in the year’s to come.