Reedsburg will not collect additional funds as a result of error

December 19, 2018
Reedsburg City Hall.

While Reedsburg taxpayers will see an increase in their tax bill, the city is not collecting any additional money.

When presenting the 2019 budget, City Administrator Stephen Compton did the calculations for the levy based on equalized property value instead of assessed value. The result left tax payers on the hook for paying 6.2 percent more than the council approved at the Nov. 26 budget hearing and meeting.

Reedsburg City Clerk/Treasurer Jacob Crosetto said the mill rate requires using assessed value for reporting to the county and state. When Compton presented the numbers backwards, the council built and approved the 2019 budget based on $600 equalized property value instead of numbers used for assessed value.

The change resulted in an increase of $95 on a $150,000 home. Crosetto said the error was recognized as the information was being sent to the county for verification.

“By that time it was too late to make any modifications,” Corsetto said in a Dec. 18 email.

With the lower number of $557 million in assessed value used in the calculation, the mill rate increased to $10.83 per $1,000 of property value rather $10.20 per $1,000 the council approved at the Nov. 26 meeting. Had the equalized property value number been used, the mill rate would have been set at $10.06 per $1,000 of assessed value.

The $43 million difference between assessed and equalized property values resulted in a significantly higher mill rate. Once the tax increment district numbers were added into the calculations that put an extra $255,000 to the base tax levy leaving it at $6.035 million.

It doesn’t mean the city is over collecting, but overestimated how much assessed value is in the city. The $6.1 million budget and tax levy are still the same.

“When you take say $100 and there is 100 people paying it if your value goes down and there is only 80 people paying it, obviously, the price goes up,” Crosetto said.

With less assessed value, it means residents will have to pay additional money to make up the difference.

“The size of the pie is the same it’s just that everybody had to eat a little bit more of the pie,” said David Estes, mayor of Reedsburg.

Throughout the three budget meetings, the council made several adjustments pulling about $180,0000 from the general fund and other levied accounts in order to meet the expenditure restraint program. If the numbers had been presented correctly, the council would’ve needed to adjust an additional estimated $375,000 in the general fund to obtain a no change in the tax rate.

Even with the error and the slight adjustment for the TID numbers, the city still qualifies for the expenditure restraint program because it hasn’t exceeded its levy limit and still plans to use its budgeted amounts discussed throughout the meetings for upcoming projects, like a possible new public works building.

Crosetto said the council has multiple options in trying to fix the mistake including a credit the next year’s tax bill, lower taxes the following year or stick with the amount that was levied.

“I think this will be the first point of discussion once the council is back in session in January,” Crosetto said. “Until (the council) really dives down and hears from the public and have that discussion between each other they won’t rule out anything.”

Compton announced he was resigning from his duties Dec. 11. His last day is scheduled for Dec. 19.

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