Editor’s note: The following commentary has been shared for publication by Whitewater City Manager John Weidl.

As budget approval season kicks off, I want to share some important updates on Whitewater’s proposed 2025 budget, set to be reviewed and discussed by our city council. This Thursday marks the first council-level discussion of the proposed budget, and I’d like to provide some context around one of the more significant changes shaping our approach.

One of the critical adjustments for 2025 is our transition from the ETF (Employee Trust Fund), the state-sponsored health insurance program available to local government employees and educators across Wisconsin. Beginning this year, we have adopted a self-funded health insurance model supported by a stop-loss insurance policy to limit risk. This change allows employees to keep their current providers. It offers zero-deductible, zero out-of-pocket options within a preferred care provider (PCP) network while also projecting to reduce health insurance premiums by approximately $250,000 annually. Before this, our health insurance costs had been rising between 20% and 40% over the last two years, depending on the network employees were in, making it clear we needed to find a better solution. 

I want to thank the city staff who researched 11 different options to help us arrive at this self-funded approach, which we hope will bring more stability and affordability to our health coverage. However, these savings are only estimates, and prudent financial management requires that we validate them before making any longterm commitments.

Health insurance reserves, management

Considering these anticipated reserves and the recent results of the operational and staffing study in the police department, there was discussion within the Finance Committee about allocating a portion of the projected health insurance reserve fund toward funding an additional police officer position. While I understand and appreciate the intent to strengthen public safety, allocating unproven “savings” to recurring personnel expenses before they are fully realized is risky and inconsistent with best financial practices. Ultimately, the budget was forwarded to the city council as recommended by the city manager.

The city manager’s budget recommendation is to sequester at least two years’ worth of the projected savings to build a sufficient health insurance reserve account. This reserve would protect against future premium increases, unexpected hikes due to high-cost claims as we are now self-insured, and the potential re-entry penalty if the city returns to ETF after the mandatory waiting period. To give you some perspective, our finance director calculated the reentry penalty based on figures from a neighboring community that recently received an ETF reentry estimate. Given our current employee count, the estimated first-year penalty would be over $700,000, which two years’ projected savings wouldn’t fully cover.

The Government Finance Officers Association (GFOA) emphasizes avoiding financial commitments based on anticipated savings until those savings are confirmed. Whitewater has earned the GFOA Distinguished Budget Award every year during my tenure as city manager, underscoring our commitment to responsible financial stewardship. Allocating reserves prematurely could jeopardize both the stability of the health insurance fund and the city’s broader fiscal health.

While adding a single officer may seem appealing, a recent study by Fitch and Associates lays out a broader framework for enhancing public safety in our community. The study outlines the need for between four and six additional patrol officers, a detective, additional technological and dispatch support, and possibly an expanded role for our administrative assistant. It also recommends considering another school resource officer (SRO) in partnership with the school district.

Fiscal responsibility, planning

Given the uncertainties surrounding our new self-funded insurance model, the most responsible approach is to allow the health insurance reserve to be built over the next two years. A healthy reserve protects against potential cost increases or the need to return to ETF, which could cost the city more than $700,000 in the first year alone due to re-entry penalties. By maintaining this reserve, we can stabilize our insurance fund, mitigate future risks, and avoid significant budget cuts if unexpected costs arise.

Alternatively, rather than using unconfirmed savings for ongoing staffing, a more strategic approach would be allocating a portion of realized savings for one-time, non-recurring expenses. For example, funds could be set aside for essential equipment or capital purchases, such as a vehicle to support additional staff and the necessary initial gear for new hires, including vests, uniforms, sidearms, tasers, radios, and other vital equipment. This would allow us to prepare for future growth in a financially sustainable way.

Regardless, suppose there is an overwhelming desire to increase the police staffing by one additional position with these funds. In that case, the city benefits more from an additional detective than a patrol officer. A single detective would provide more impact in terms of investigative capacity, crime resolution, and case management. Given our current challenges, adding one patrol officer does not offer the strategic or operational benefits our department needs. To improve public safety, we need a comprehensive staffing plan rather than isolated, piecemeal measures that may not yield significant value.

Sustainable public safety funding

As we move into 2025, staff has recommended — and our recent study by Fitch and Associates supports — pursuing a referendum to create a stable, longterm funding source for public safety. This approach allows us to address staffing needs with dedicated, voter-supported funding rather than relying on projected reserves that may not materialize as expected. By building a healthy reserve account for insurance needs over the next year or two, we can strengthen our financial footing and potentially use those proven expenditure reductions to strategically support a voter-approved referendum for police staffing, creating a solid support system for the city’s future needs.

This budget season, I want residents to know that the city manager’s budget recommendation is based on best practices, careful forecasting, and a fiscally conservative approach to municipal budgeting. The goal behind this recommendation is to ensure that, no matter what, taxpayers aren’t left holding the bag if future changes to our health insurance become necessary. For example, in a household budget, careful planning, setting money aside for future needs, and not spending money before it shows up helps ensure longterm stability and prepare us for the unexpected. 

I encourage all residents to join us at the meeting in person or online to hear the discussion and consider how these decisions impact our community’s future. Your insights and involvement are invaluable as we work together to secure a stable and resilient community for all.