Barron County presents 2025 draft budget, proposes $2 million short-term note to restore fund balance

Barron County Administrator Jeff French laid out the county's first draft 2025 budget on Sept. 16, proposing a short-term borrowing plan to replenish fund balance after planned capital draws.

French told the Board of Supervisors that the county plans to take roughly $2,000,000 out of fund balance now and replace it with a short-term note from Sterling Bank at a fixed rate of 5.5 percent, with a single payment due Feb. 1, 2026. He said the loan paperwork will be presented to the County Board for approval at the Oct. 21 meeting. "We'll replenish that with a short term note or it's gonna be brought forward to this County Board next on October 21 to refill that with a short term note from Sterling Bank at 5 and a half percent," French said.

Why it matters: the county has applied larger one-time draws from capital and other fund balances in 2024 to pay for communications upgrades, a proposed Sally Port study and dispatch improvements. Without replenishment, French said, the capital improvements fund balance would fall to about 24 percent of target, below the level rating agencies and some bond covenants expect. "We try to always keep our fund balance, at least Jody and I try, to keep it between 30-33%." he said. He argued restoring a roughly 31% balance will preserve the county's credit profile if it later borrows in the open market for the Sally Port or other long-term projects.

Key budget choices and reasoning - Sales tax: French said sales tax revenue, not property taxes, is the main driver of the county budget. "It's no longer the property taxes that drive the county budget," he said, noting sales tax collections allow the county to limit levy increases. The draft projects a modest 1.3% increase in sales tax receipts. - Short-term borrowing: The administration proposes a $2.0M to $2.5M short-term note (Sterling Bank commitment letter shown to the board). French said the county's AA- rating and the bank's terms produced a better rate than the State Trust Fund. The loan would be repaid in a single payment in early 2026. - Health insurance: The draft budgets a $466,000 increase in the county's self-funded health insurance costs; the administration proposes using $233,000 from operations and $233,000 from fund balance this year while pursuing longer-term stop-loss and reserve strategies. - Capital projects: The draft shows a large capital outlay increase driven by planned work on campus boilers/HVAC, communications upgrades, and the Sally Port study. French noted the $1.93M capital figure assumes refilling fund balance via the short-term note rather than depleting reserves. - Personnel and contingencies: The draft includes a 3.5% COLA and some limited personnel requests; department-level cuts and vacancies are still being considered.

Questions and next steps Board members pressed for details about large projects that drove the capital requests, and asked whether borrowing now was prudent if interest rates fall. French said his advisors expect possible rate reductions later in the funding cycle and that the short-term note lets the county restore its fund balance now while waiting to borrow long-term at potentially lower rates. He also said the Property Committee will refine campus HVAC and roofing requests before the October cycle. The administration will present the short-term note for formal approval on Oct. 21, and the budget will be refined between September and October.

Ending French framed the draft as conservative and intended to preserve the county's credit strength while funding urgent capital needs. The board took no final action on the budget at the Sept. 16 meeting; the administration will return with loan documents and a supplemental budget for further votes.