The City of Sheboygan has closed the books on the 2017 financial performance and issued two reports that will enhance the residents and taxpayers understanding of city finances. The Popular Annual Financial Report (PAFR) is intended to provide transparency and accountability of both financial and non-financial city information. It provides a summary of the financial activities of the city which are audited by the firm of Schenck SC. It is the city’s goal to communicate the financial operations of the City of Sheboygan in an understandable report. The shared information is consistent with the highest standards of government financial reporting and the best practices to achieve financial transparency.
Throughout the year, the city staff works on budgets, audits, financial policies, financial review, financial forecasts and financial management to better serve the residents and taxpayers. The Comprehensive Annual Financial Report (CAFR), which contains the full financial detail, is also available on www.sheboyganwi.gov or may be viewed in print at City Hall.
The General Fund is the primary operating fund of the city and accounts for revenues and expenditures that are not required to be accounted for in other funds. The principle sources are property taxes and state aids. All departments are financed through this fund with public safety and public works as the largest expenditures.
The Fund Balance of the General Fund is the difference between assets (what the city owns) and liabilities (what the city owes). At the fiscal year-end of 2017, the General Fund balance was $20,461,650 or 68 percent of 2017 expenditures. Funds are allocated each year in the city budget to various departments, programs and activities. However, if those funds have not been expended at the end of the fiscal year, they automatically revert to the General Fund’s balance rather than being carried forward as a departmental surplus.
Several of the major projects for 2018 include significant improvements to city buildings and infrastructure. In 2017 the Capital Improvements Commission and the Common Council authorized the City Hall renovation at $10.5 million, multiple street resurfacing projects totaling $4.9 million, and $3.1 million expansion of the SouthPointe Enterprise Campus. Funding for these projects is derived from a variety of sources including General Obligation notes and bonds.
A key factor addressed by the rating agencies during bond ratings is stable General Fund reserves similar to the City of Sheboygan’s. In June, the City of Sheboygan received news of its superior bond rating from Moody’s Investor Service. The bond rating of Aa2 is a reaffirmation of its previous year rating. Moody’s cited the strong financial position of the city with solid reserves and the below average debt burden with quick repayment schedule.
The General Fund revenues for 2017 totaled $33,665,268. This is an increase of $538,472 from 2016. The greatest source of revenue is taxes at 47 percent. The expenditures from the General Fund for 2017 totaled $35,104,909. This is a decrease of $1,960,948 from 2016. The largest expenditure is 57 percent for Public Safety.
The City of Sheboygan strives to manage the unspent General Fund budget in the most fiscally responsible manner possible. The benchmark investment percentage for the amount of unspent General Fund balance is a minimum 3.7 percent. Its benchmark has been exceeded in four of the past five years. In 2017 the City achieved a return of 4.06 percent managing these funds.
To illustrate where taxes paid by property owners are spent we will use the average home assessment value of $108,927. This home paid $1,062 for City of Sheboygan services. The figures are based on the 2017 Budget adopted by the city and the portion of the budget supported by property taxes net of other sources of revenue.
To see the PAFR and CAFR, visit www.sheboyganwi.gov/2017-financial-summary.