Kewaunee County Board Activities – July 22 Meeting

Your County Board is at work and doing their best to deal with the unknown financial impact of the closure of the Kewaunee Nuclear plant.  The county is preparing for the loss of $713,000 loss of income while faced with a levy limit freeze.  To accomplish that, the Finance Committee headed up by Supervisor Luft, have focused their attention on the budget to see where they might find savings without impacting county services or imposing undue hardship on the employees.

It was determined that by making changes to the health insurance program that it would be possible to save an estimated $300k-$350K with reasonable changes.  Our current insurance cost for 153 employees cost the county $2,565,770. 

A group of 16 county employees have been working with the Finance Committee to assist in making the decisions on the health plan, looking at deductibles, copays, and premium distribution.  This group of employees have been a great help and most cooperative in wading through this complicated issue.  Another meeting is scheduled for August 5^th to further discuss and decide which parts of the health care will be changed.

Assuming a $300K plus savings in this area can be realized, we still have to find another $350K plus in the budget.  The Finance committee have directed Mr. Dorner to work with the various county departments to find those monies in the budget.  This can be challenging when we have departments that have 95% of their budget in salaries and benefits.

The Highway Committee put forth a resolution to move $1.4M from the Highway DK fund (old Hwy 57 roadbed) and to put that money to use on our county roads.  This was a good move by this committee as the DK money had been given to Kewaunee County some years ago by the state for the maintenance of Hwy DK and this road is in good condition.  This resolution passed with a unanimous vote.

Another resolution put forward by the Law Enforcement Committee to extend the County Sheriffs’ department management contract with the City of Algoma passed unanimously.  Although when this program was started it was soundly criticized it has worked very well and the feedback now is all positive.  This program just makes good sense, both economically and from an overall continuity perspective.  In my opinion, this is a program that could be expanded to other communities in the county.

On the groundwater issue, the Land and Water Committee have been working with Andy Wallander to finalize an ordinance that will deal with the application of manure on certain Karst featured lands in the county.  It now appears the new ordinance will be ready for first reading at the August 19^th board meeting.  Assuming that gets passed by the board in the September meeting, the actual implementation of the ordinance would not occur until each township was able to pass a referendum adopting the ordinance.  That would not happen until the spring of 2015 and would go into practice for the winter of 2015/2016.

Another item on the groundwater.  Conversations have already taken place with Door and Brown counties to have them consider and pass a resolution in their counties similar to the resolution we passed in June.  The ultimate goal here is to have Door, Kewaunee, Brown, Manitowoc, Calumet and Outagamie counties all work together to convince the DNR and DATCP that our counties are indeed a bit different given our Karst featured land and given that, we should receive assistance to ensure our groundwater is protected.

Over the next month, we will be very busy trying to sort out the impact of the assessment of the Kewaunee Nuclear plant.  The players, Carlton Township, Kewaunee County, Wisconsin Department of Revenue and Dominion have to figure out how to handle a problem never before dealt with in our state.  I explained the complexity of this issue in an earlier article on July 2.

All in, we are making progress, we have a long way to go, but I am encouraged by remarks from the public that are supportive of actions this board is taking.  The committees are working well together and it is not business as usual.

Kewaunee County Landfill Implements New Daily Cover System

Over the past years, our Kewaunee County Landfill has struggled with the daily cover at our landfill.  The DNR requires that each day any waste is added to the landfill that, after the end of the day, that waste must be covered with an approved material in order to reduce odors and keep the waste in place. 

Daily cover is a complex issue.  Depending on the density of the cover type, the number of cubic feet of space consumed on a daily basis can be significant.  Too much cover negatively impacts the overall economic well-being of the landfill.  The goal is to keep the daily cover to 20% or less, thus consuming less air space that would be available for more waste.  So with that in mind, our landfill staff and landfill committee set about to find a more economical way of handling daily cover that would be approved by the DNR.

Kewaunee County received approval from the DNR to employ a new Enviro Cover that in effect is sort of like covering the landfill open space daily with a 1.25 mil of degradable plastic covering (sort of like the green garbage bags you use at home).  Although this type of landfill cover is used extensively in some other states, Kewaunee County Landfill is the first landfill in the state of Wisconsin to use this cover type. 

In the picture provided, Steve Wegner is applying the cover to the landfill utilizing the Enviro Cover System that is attached to the front of a Cat loader.  The Enviro system lays down a 16 foot wide cover while at the same time applying a material (dirt, sand, shredder fluff, etc.) to hold it in place on the landfill.  Steve caught on very quick and even with a good stiff wind blowing, had no difficulty in applying the strips of degradable film over the waste.  The seagulls?  Well, they were wondering what happened to their food source. 

It appears this system will work well for our landfill as it will reduce the amount of space consumed by daily cover.  Also, from the standpoint of efficiency, one man can do the job by himself.  It is estimated that it will take 30-40 minutes each day to seal off the landfill.  There are different grades of the degradable films that would allow us to seal an area off for up to five weeks before having to apply more fill in that area.

Kewaunee County Faces Financial Challenge

The challenges facing Kewaunee County are many, but one in particular has jumped to the top of the list.  That challenge is the financial impact the closure of the Dominion Kewaunee Nuclear plant will have on the county. 

This gets to be a bit complicated, so pardon the length of this description.  Several years ago, legislation was passed at the State that dealt with the possible event of closing of the nuclear plant and how that closure would impact our county financially.  Kewaunee Co. annually receives $713K (6.5% of the total Kewaunee Co. levy limit) from the State, for the power agreement that is in place with Dominion. 

Overall, the financial closure arrangement was fairly well thought out by the legislators.  But, as we learn over and over with big government, when they pass laws, they do not think of all the eventualities that face counties, townships and municipalities.  As long as the plant was generating electricity, Dominion was not paying real estate taxes on the plant with exception of certain farm land that was taxed at agricultural land rates.  The entire Dominion site is just over 905 acres.

The legislation that was ultimately passed was designed to lessen the financial impact to the county.  In the event of a plant closure, a provision reduced the annual power agreement payment by 20% annually over a period of five years.  That would mean the county would lose $142K each year.  So, for example (following closure), year 1 the revenue shortfall would be $142K, year 2, $284K, year 3, $426K and so on until year 5 when we would have felt the total impact of a $713K revenue shortfall.  Although that is not a positive scenario, it lessened the financial blow.  However, one more provision in the legislation was, that, any real estate taxes paid by Dominion to the county would reduce dollar for dollar the amount of dollars paid the county for the power agreement.  So, if an assessment of the plant turned out to be in excess of $66M, the entire $713K of the power agreement would be lost, year one.  At the time this is written, this eventuality is quite real.

Kewaunee County, by law, cannot raise their tax levy, we have a frozen levy limit of $11.1M.  There are three ways we could increase our revenue in the county.  One would be to put in place a sales tax (this sales tax, by law, is supposed to be used to decrease real estate taxes, but as typical with government, in counties where the sales tax has been instituted the money is spent on other expenses). Another would be to have county wide referendum to increase our taxes to cover the shortfall of the revenue.  And a third would be, in the event of new construction in the county.  New construction increases our overall equalized value and thus increases our tax revenue.  Kewaunee County has a $7.77 tax rate now, the 5^th highest in the state, so any idea of increasing taxes once again is not very palatable.

Now, keep in mind, Kewaunee County zoning lies with the townships, not the county.  So, assessing the value of the nuclear plant for tax purposes lies with the township of Carlton where the plant is physically located.  The Department of Revenue, State of WI. (DOR) ruled the Dominion plant was not “new construction”, so that ruling effectively negated any idea the county equalized value (and taxes) would be increased.  So, this is where we are at the moment.

There could be one more complication, that being in the event any property assessment placed on the nuclear plant being contested by Dominion.  Here is an example of how that would work.  With an assumed value of $100M, the property tax paid by Dominion would be in excess of $1.6M (county and township, etc.) annually with the county receiving in excess of $757K.  On the surface that looks to be a good scenario as the county is made whole with the tax increase.  But, wait a minute…..remember we have a frozen levy at $11.1M and we would lose the entire $713K power agreement money.  Also, in this instance, the county would be required to reapportion the taxes across all land owners in the county.  So, it would be conceivable the tax rate could decrease.  But we’d have to find $713K to cover the budget gap.  By the way, our finance committee is working on that scenario right now.

Now let’s take that to the next extreme.  What if, Dominion were to contest the assessment in court.  After all, right now that plant is not generating any power and it is really a liability to Dominion.  Perhaps they believe the value is not that great.  If they won that contest?  Now the county would have to go back out and recover the taxes from all parties and this, I am convinced would be a real bad experience for all involved.

At this time we are exploring all options that may in part resolve some of the shortfall we may experience.  We are working with all parties involved to hopefully come to a resolution that is good for all parties.

We are working on a number of fronts internally to deal with the possibility of the loss of the $713K.  For to include a re-evaluation of our county health insurance which is a high cost ticket item for the county.  We have assembled a working group of 16 employees who are working with our insurance consultant and the Finance Committee to determine how we can save a targeted $300K on our plan without severely impacting the overall health care plan for our county employees.  The finance committee has instructed our Administrator to come “find” additional savings in our budget to deal with the lost revenue issue.

A few other “hot issues” in the county we are working on include; the implementation of Family Care sometime later this year, Land and Water, in concert with Health Services put forth a Resolution dealing with the impact of the application of manure to our groundwater (that was passed by the full board in June) and are now working on a new ordinance that will deal with the application of manure on our shallow Karst featured land.  First reading of that ordinance will hopefully be completed at the July board meeting.  In addition, we are in the process of re-evaluating the long term mission of our highway department and determination of landfill future after our current cell is filled.

Our new board and new committees are serving the county well, they are engaged and, in my opinion are dealing with the challenges in a professional, logical manner.  Thank them as they are putting in the extra time to get the job done.