County looks to cap reserve funds at $2.5M

DEFICIT SPENDING

We need to not keep compounding the problem year after year. They're deficit spending at the state level right now, too.”

Tim Wondra, Lee County Supervisor

RESERVE IS A GOOD THING

I know there are concerns about the CREF account, that not every county has it. But it's a good thing, not a bad thing. It sets us up for success in the future, I believe.”

Garry Seyb, Lee County Supervisor

LEE COUNTY – Lee County Supervisors are looking at capping reserve funds in the wake of budget tussles over the past three months.
Supervisors held a workshop following their regular meeting Tuesday morning to discuss the current proposed tax levy for 2026-27 and the status of the County Reserve Fund.
Proposed budget figures had the levy reduced about 10 cents from last year, despite conversations from supervisors around dropping the levy 58 cents per year to try to get to a general basic fund cap that was put in place for 2029 by legislators last year.
Lee County Farm Bureau’s Brent Koller had pushed supervisors last week about concerns outlined in a letter sent to the board. Those concerns included 2% pay increases to county employees after union negotiations had been reached at 1.5%; failure to implement the planned levy reduction; and excessive funds held without a defined purpose, as the reasons for their concerns.
At the workshop, Budget Director Cindy Renstrom prepared a couple different options with regard to the levy, one would decrease the levy an additional 19 cents to get to half the .58 reduction the county had planned. The other was for an additional 48 cents to get to the full planned reduction.
Renstrom said one way to help reduce the levy was to shrink the ambulance fund balance. However, in doing so, the county would increase its deficit spending to close to $2.8 million for the next fiscal year.
“So, it’s doable,” said Supervisor Denise Fraise, who’s advocated for the county sticking to its plan of dropping the levy rate 58 cents per year.
“It’s doable,”  Renstrom said.
Fraise said the county has always deficit spent and, in more than 20 years, she’s never seen a balanced budget.
The county is looking at a carryover balance of about $8 million on June 30, but that doesn’t include the reserve fund.
Supervisor Tim Wondra said next year the county will need to make more cuts because deficit spending will double.
“We need to not keep compounding the problem year after year. They're deficit spending at the state level right now, too,” Wondra said.
The county’s total budget is running around $48 million, Supervisor Seyb said.
“I know there are concerns about the CREF account, that not every county has it. But it's a good thing, not a bad thing. It sets us up for success in the future, I believe,” Seyb said.
“Then we have our carryover balance and, I believe between those two, we should have at least 10-15% of the total budget in those numbers. Right now, we have 12 to 13% between the carryover and the CREF fund.”
He said if the board is committed to maintaining the emergency fund at a certain level, the rest of the funds could spill back into the general fund for potential property tax relief.
“We still need to be cognizant that that won’t be a consistent level of funding and will ebb and flow,” he said.
Renstrom said the county could refill the emergency fund when they spend.
Seyb suggested a $2.5 million cap in emergency funds with any other additional funding going back into the general fund once the emergency fund is full.
He said the reserve fund gives the county the option of funding other things outside operations that make up the budget, and the funds aren’t generated with property tax dollars, but interest on other revenue including speed camera revenue that’s being captured.
“I don’t want to see us go backwards. This board, and the previous five or six years' boards, have dug us out of a hole,” Seyb said.
“It was terrible and we’re now in a position where we can solidify things, can make taxes predictable, and start doing things the taxpayers want us to do while maintaining the services we have.”
Supervisor Chair Ginger Knisley said the county should be in a financial position to help when needed, but they can’t be indefinitely stockpiling money.
No action could be taken in the workshop but Renstrom was instructed to bring back a levy sheet with a 58-cent reduction in the levy to be presented to the board next Tuesday, which is the final week the county can consider changes.