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Reedsburg City Administrator resigns over error, taxes will increase over 6 percent

December 12, 2018

Stephen Compton resigned from his duties as city administrator for Reedsburg amid budget errors and a miscommunication with the council when presenting the 2019 budget that resulted in an over six percent tax increase for taxpayers the council did not approve.

Compton’s last day will be Dec. 19, according to a press release from the city. He took over as city administrator in 2016. Effective Dec. 20, Reedsburg Chief of Police Tim Becker will take over as interim administrator and will work alongside city clerk/treasurer Jacob Crosetto until a new full-time administrator is approved. As of Dec. 11, Compton could not be reached for comment regarding his resignation.

Compton’s resignation comes after he presented to the council at the Dec. 10 regular meeting he had improperly presented 2019 budget numbers. The numbers were based on the city’s equalized property values rather than assessed value, along with miscommunication when presenting it to the council about the council’s desire to lower the tax rate or keep it the same.

When the city reported an increase of $31 million in a record assessed value of $600 million, that number was really equalized property value. Assessed value for the city in 2018 is $557 million, a decrease of about $2 million from 2017. The mistakes resulted in a 6.2 percent increase for taxpayers, about $95 for a $150,000 home.

Compton also left tax increment district numbers off prior to the council passing the budget. In prior years, those numbers had been included to present the final number of how residents’ tax bills will be affected.

“The council wants to know what is going to happen on people’s tax bills because that’s what every taxpayer is concerned about,” city clerk/treasurer Jacob Crosetto said after the meeting. “They are not concerned about the value of the TID, the equalized value of the city or the assessed value. They want to know what they going to be paying out of pocket.”

The results set the city’s mill rate at $10.83 rather than a previously approved no increase from the year prior of $10.20. The base levy was set in the $6.1 million city budget at $5.78 million, however with $255,000 in tax incremental district numbers it puts it the city’s tax levy at $6.035 million.

“People aren’t being overtaxed,” Crosetto said. “We’re not collecting more than we should’ve, it’s just there are less people paying that amount. We’re not budgeting to have any extra money it’s just now since there is less value the rate they are paying is slightly higher. It’s just since there is fewer people paying it equals out to be the same but people have a bigger piece of the pie.”

Crosetto said despite the mix-up, the city’s assessed value is expected to grow with future developments like Casey’s General Store, but only to about $16-$20 million. Crosetto said anything can change with assessed value, especially if someone remodels or reassesses their home.

Misunderstanding

Prior to passing the budget, the council made several adjustments from the general fund and levied accounts to meet the expenditure restraint program. However, at the Dec. 10 meeting with his own tax bill in hand, Compton walked the floor sharing in his reports the council would’ve needed to make additional adjustments with an estimated $375,000 to decrease taxes. The city originally proposed a five-cent decrease in the budget before deciding on a revenue neutral budget when the budget was first presented in October.

“Originally, I had brought up the five-cent reduction number to you,” Compton said. “We would’ve had to go further than that.”

Compton said when crunching the numbers there was some misunderstanding on how both parties understood what revenue neutral meant. He also said he wasn’t used to the budget forms layout of plugging in separate numbers for the tax increment districts.

“When we made the motion regarding revenue neutral you heard, I believe, tax bills not changing. I heard, reduce our normal tax levy from that five percent reduction back up so that we weren’t going up or down,” he said. “I didn’t hear you guys wanted to take your budget down that number really was not out in the presence because I was focusing on the $9.78 (per $1,000).”

Compton said that information was not shared at any of the three meetings the council had related to the budget, including one with the finance committee, and a public hearing before it unanimously passed the $6.1 million and tax levy at $5.78 million two weeks ago.

“My error was not bringing this out. That’s my error,” Compton said. “I’ll own up to that because you should’ve had that information.”

Disturbing

Since it is Compton’s third budget as city administrator, Fourth District Alderperson Tom Seamonson asked what was done different. Compton said the 2018 flood left less time than usual to prepare the budget along with trying to handle the tax formula with an additional $31 million coming into the city.

“If it was not possible to do a zero this year, then I feel that this should’ve been brought up we have this $375,000 hole to be neutral,” said Phil Peterson, third district alderperson. “Whatever it ended up being we would’ve had to go there. That was never brought up at our public meeting at budget meeting meeting one or two.”

Third District Alderperson Calvin Craker said he was in shock when he received his tax bill. Craker voted against the revenue neutral budget at the Nov. 12 meeting. While he took a moment to think about voting yes or no in a roll call vote at the Nov. 26 meeting, he voted for the final budget.

“I felt like I didn’t do my job as a city councilman,” Craker said. “Because the last few years we’ve been reducing our debt. There’s people that say the little things don’t matter but a little bit in the other direction helps everybody and that’s what I thought I was going for, and then I see this 6 percent and it’s disturbing.”

First District Alderperson David Moon said he “didn’t understand what he was voting for” and the council was “whacking away” at the budget finding ways to cut expenses to keep taxes low.

“We’ve always been conscious about keeping our taxes low serving our constituents,” Moon said. “Yes, things were rough with the flood and what was going on, but if it meant more time needed to whittle down the budget to do what we needed to do, it should’ve been done.”

Mayor David Estes said he was “floored” by not knowing about the increase until he got a phone call from another council person. Estes said if the council would’ve known about the issue prior to passing the budget, efforts would’ve been made to fix it.

“I know these councilmen do their darndest,” Estes said. “They worked hard this budget cycle to what they were interpreting was a zero percent increase.”

Estes has been on the council for over a decade and said he always had been presented with a revenue neutral budget or a decrease to the tax rate, and said figuring in the extra for tax increment was never really something the city had done.

“Disappointed is the beginning for me,” Estes said.

Clearing up communication

Little can be done to change the budget since final numbers have been published, tax bills have been sent out and residents already are paying in. Compton said city will have to deal with the mistake in the future and make adjustments, especially when 2020 rolls around. City clerk/treasurer Jacob Crosetto said a correction could be made in a future tax year but the county recommended a tax credit for residents, since they already are paying taxes.

“The legality of an actual refund is kind of up in the air,” Crosetto said. “The finance committee and the council are looking into that to see what they can do.”

Compton added additional building projects can contribute to future assessed value growth like Sharratt Warehouse estimated at $12 million. In order to handle that growth and clear up future miscommunication, Compton said starting in the first quarter the city will begin discussing the budget on a regular basis rather than toward the end of the year to better prepare for its final passing.

Crosetto said the city will begin looking to fill the administrator position, adding the council hopes to meet sometime in January to determine the next steps for filling in the position. The city already planned to fill a full-time administration position since money has been set aside in the 2019 budget valued at $104,000.

The city administrator position originally was a part-time position for 24 hours at $45 per hour. Compton’s hours later increased to 32 hours in October to give him more time to prepare the 2019 budget. The council will not meet Dec. 24 due to Christmas Eve, an action item approved at the Nov. 12 meeting.