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  1. New Treasurer Workshop September 24, 2008

  2. Cindi Gamb, CMTW, CMC, WCMC Village of Kohler Myra Piergrossi , CMTW, CPA Town of Menasha John Schlice , CMTW, CPFA City of Stevens Point Helen Schmidlkofer, CMTW, MMC, WCMC City of Chilton Jan Winget , CMTW, CPFA, MMC, WCPC Village of Union Grove Presenters

  3. Basic Duties of the Treasurer • City • Town • Village

  4. Budget Preparations • Statutory Requirements • Public Hearing Notice • Levy Limits • Expenditure Restraint Program (ERP)

  5. Statutory Requirements • Create Budget (65.90) • Actual Exp & Rev from prior year • Current Year Actuals (6mos) • Y-E projections • Public Budget Hearing • Notice (15 days prior) • Resolution to adopt Budget & Levy

  6. Levy Limits • Info from Ehlers’ 2008 Public Finance Seminar

  7. History of Levy Limits • Sec 66.0602 Wis. Stats. • Originally Adopted in 05 effecting 05 & 06 Levies • Law expired 1/1/07 • Renewed with adoption of Budget Bill in November 2008 • Extends Levy Limits to 11/30/09

  8. Levy Restrictions • Limit on Levy • 2007 Levy, 3.86% or % growth in new construction, whichever is greater. • 2008 Levy, 2% or % growth in new construction, whichever is greater • EXCEPTIONS to Levy Limit • Debt Payments • Pre 7/1/05 Debt • Post 7/1/05 Debt • Lease Revenue Bonds • Revenue Bonds issued under 66.0621

  9. Levy Restrictions (cont.) • Exceptions to Levy Limit (cont.) • Transfers of Service Responsibility between governmental units. • Annexations resulting in increases or decreases in levy requirements for both jurisdictions. • Levies associated with the capture of 50% of the increment value from a closed TIF district

  10. Levy Restrictions (cont.) • Exceptions to Levy Limit (cont.) • Levies for Joint Fire Departments • Definition broadened to include all joint agreements under Sec 66.0301 Wis Stats. • Amount allocated limited to CPI + 2% • Levies by Newly Incorporated Villages for Police services if no PD had existed • Town Exceptions if approved by Annual Town meetings. (for Towns w/population < 2,000)

  11. Levy Restrictions (cont.) • Referendum Exceptions to Levy Limits • Odd numbered year levies – elected board may call a special referendum. • Even numbered year levies-referendum must be held at the next succeeding spring primary or election or September Primary or General Election. • April Elections Problematic to Statutory ballot language requirements. • Statutory procedures and required referendum language must be followed. (If you are considering referendum….talk to DOR to make sure of procedures)

  12. Municipal Levy Limit Worksheet

  13. Treatment of G.O. Debt • Levy limit worksheet distinguishes between treatment of debt based on its date of authorization • Prior to July 1, 2005 • After July 1, 2005 • Authorization refers to the act of adopting an initial or authorizing resolution (not actual issuance)

  14. G.O. Debt Authorized Prior to 7/1/05 • Any increase in total debt service from previous years payment is added on Line 11 of the levy limit worksheet • Decreases in total debt service are not deducted, therefore declining debt service provides ability to use those funds for operating or other purposes.

  15. Decrease in Available Non-Levy Revenues for Debt Service • Revenue sources other then the tax levy are often used to make a portion of debt service payments: • TIF • Utility Revenues • Special Assessments • Impact Fees • Rents and Leases

  16. Decrease in Available Non-Levy Revenues for Debt Service • Decreases in these types of non-levy revenue sources will result in • Use of levy capacity for debt service that could have otherwise been utilized for operations or other purposes • Actual requirement to reduce operating levy to accommodate debt service payments

  17. G.O. Debt Authorized after 7/1/05 • Entire payment amount is excluded from levy limits • Total levy required is added as an adjustment on Line 12 • The same amount is excluded (Line 2) in the following years levy calculation • The amount placed on Line 12 should be the actual levy dollars needed, not the total payment (if different)

  18. Revenue Debt • Levy for revenue shortfalls • If pledged revenues (e.g. sewer revenues, water revenues, TIF increments) are inadequate to meet debt service payments, bond covenants normally require the issuer to consider levying for the shortfall • Amount of shortfall exempted from levy limits (place on Line 14 of worksheet)

  19. Revenue Debt • Levy for revenue shortfalls • This beneficial provision was added in the most recent version of levy limits, first affecting the 2007 levy for 2008 budget • Prior to this change, any annual appropriation made would have had to been accommodated within the issuer’s operating levy

  20. Revenue Debt • Levy for revenue shortfalls • WORD OF CAUTION – exception only applies to revenue bonds issued under WI Statute 66.0621 • Most CDA Lease Revenue Bonds issued under the authority of WI Stats 66.1333 & 66.1335 • If necessary, existing CDA obligation may be able to be reauthorized under WI Stats 66.0621 to take advantage of this exception • Preferred solution is to exempt annual appropriations for all revenue obligations regardless of the statutory authority they are issued under

  21. Revenue Debt • Special exception for Lease Revenue Bonds issued prior to July 1, 2005 • Any increase in lease payment from the preceding year can be added to the levy limit (line 13 on worksheet) • Works like G.O. debt authorized prior to July 1, 2005 • DOES NOT allow the addition of any shortfall amount to the limit, only the net increase from the preceding year’s lease payment amount

  22. Penalties & Correcting Mistakes • Excess levies will result in the DOR reducing the State Aid by said excess amount. • DOR may waive penalty if caused by certain clerical errors: • If DOR errors in assessing to County or other taxing jurisdiction greater or less value than should have been. • If a municipal clerk or County clerk errs in tax roll which causes the levy to be erroneous.

  23. Expenditure Restraint Program (ERP)

  24. Tax Incremental Financing District • TIF Calculation Worksheet • TIF District Criteria Matrix

  25. Calculating Your Tax Rate

  26. Document/Information Required: Certificate of Apportionment of State and County Property Taxes (County Levy) Tax Levy Certification for School District(s) in your municipal entity Tax Levy Certification for the Technical College District Your municipal tax levy, including the tax increment for any tax incremental districts (TIDs) Final Statement of Assessment from theDOR

  27. Information (cont): The November letter from the DOR showing the State School Levy Tax Credit and the Estimated Major State Aids If you have TIDs you will also need the County Apportionment Sheet from the DOR showing the equalized value reduced by the TID increment - This sheet also shows the TID Value Increment for each District in your municipality

  28. TID District??? If you have a TID you must calculate the tax increment before you calculate your tax rate! The tax rate is based upon the tax levy plus the increment for all of the taxing jurisdictions except for the State tax levy.

  29. Calculating the Increment I use an Excel spreadsheet to calculate the increment. I’ve been using this spreadsheet long before the DOR put their form on-line. Also, using the spreadsheet allows me to enter information as I receive it from the taxing jurisdictions and gives me a “peek” at what the increment could be for budgeting purposes.

  30. The Tax Increment (cont) Using the equalized value without the increment, the tax increment and the equalized value with the increment included, you calculate the tax increment for each TID in your municipality. By using a spreadsheet you can calculate the increment amounts for multiple TIDs and keep the totals separate. On the DOR website the increment is calculated as a total for all districts.

  31. DOR Tax Increment Worksheet If you have TIDs this worksheet must be filed on-line. * You can do this one you know all of the tax levies affecting your TID. * Don’t forget to print a copy for your records!

  32. On to the Tax Rate If you have no TIDs this is where you begin – with TIDs this is where you continue. Another spreadsheet pulls together all of the information needed to calculate the tax rate.

  33. Tax Levy Worksheet The first column of numbers is for the tax levy as certified for each taxing jurisdiction. The second column is the levy plus tax increment. If you have no TIDs you don’t need this column. The third column is the tax levy (or the tax levy plus the increment) divided by the total assessed value for the district. This is the tax rate or mil rate.

  34. School Levy Tax Credit Using the School Levy Tax Credit from the November letter from the DOR you can now calculate the School Levy Tax Credit per $1,000 of assessed valuation. You now have your net tax rate!

  35. A Few More Calculation! Calculate the rate for the estimated state aids. This information will be on the tax bill and you will need to make sure this totals balance to the printed tax roll. Verify your tax rate! Make sure that your total tax rate plus the School Levy Tax Credit will collect enough funds for all of the tax levies plus the tax increment. Send your rates via e-mail or fax or take your rates to whoever prints your bills!

  36. Multiple School Districts?? If your municipal government has multiple school district you need to calculate the tax rate for each appropriate school district. Use the assessed value breakdown for each school district as shown on the Final Statement of Assessment.

  37. Are We Done?? A couple of words of caution - Always verify all of your totals before the bills are printed, including your state aids. Your tax rate should be slightly over or under the total due to rounding. - Be aware of what your tax bill should be and check it or verify the totals on a tax bill – do the calculations!

  38. Remember – errors happen – even with computer programs. You don’t want to send out a second “corrected” tax bill – especially if the second bill is higher!

  39. Statement of Taxes (SOT) • Other Taxing Jurisdictions Levies (on SOT) • Most used Sections of SOT • Discuss Special Assessment/Special Charge Detail

  40. Payment Options • Multiple Installments

  41. Tax Settlement • Review January Settlement • Computer Report (thru 12/31) by specifics (levy, spec charges, spec assessments, etc) • Remove any adjustments • Should balance to your tax cash account • % of levies collect is used to pay, due by 1/15

  42. Lottery Credit • Frequently asked questions • Lottery Credit application forms

  43. Delinquent Personal Property Taxes • Chargebacks • Recinded/Refunded Taxes

  44. Cash Management For Municipalities

  45. What You Will Learn Today? If you don’t learn anything else today, you will learn that Cash Management is a simple concept. You will also learn how your bank can help you: Protect your deposits Streamline you operation Automate your payment and collection process Create efficiencies and leverage technology Improve Cash Flow

  46. Cash Management is a Simple Concept Money Comes In, Needs To Be Concentrated and Then Goes Out Collections Liquidity Management Disbursements Investment Check Check Cash Cash Cash Management Wire/ACH Wire/ACH Credit Card Credit Card Loan

  47. There is a “Suite” of Products & Services To Address Each Step of the Cycle Collections Concentration and Liquidity Management Disbursements Image Deposit Direct Lockbox ACH Direct Debit Wire Transfers Vault Merchant Processing Compensating Balances High Balance Savings CDs and Sweeps Document Management Information Reporting Commercial Card Wire Transfers Direct Deposit (ACH) PayCard Account Reconciliation Positive Pay ACH Debit Filter

  48. Key Industry Trends & Issues in Cash Management Fraud Check Fraud – Positive Pay & Teller Line Protection Unauthorized Debits – ADA Debit Block Internal – Credit Card Program Monitoring – Information Reporting Reducing Float & Extended Payment Terms Image Deposit Direct Information Reporting Credit Card Program Electronic Purchasing Credit Card Program Web-based ACH Paymentech Merchant Services – Accepting Credit Cards

  49. Key Industry Trends & Issues in Cash Management Fluctuating Interest Rates Compensating Balances Maximizing Earnings Collateralize Funds Liquidity Management Paperless Office Lockbox with Imaging Check Services with Imaging CD ROM Check Storage Document Management

  50. Cash Vault Services – Product Description Image Deposit Direct Cash Management • Image all checks using Web based application and a compact check scanner. • Enter associated transaction data (amount, customer information) • Submit the deposit electronically to the bank • View checks and associated documents online for research purposes. Image Deposit Direct Lockbox Positive Pay ACH Debit Block Doc Manager Solutions Commercial Card Paymentech Information Reporting Key Features • Accelerate funds availability • Streamline your receivables, add security and reduce transportation cost. • Streamline account research and service process by reviewing documents online. • Reduce your overall accounts receivable management cost.