Consultant outlines municipal finance basics, levy limits and debt considerations

Eric Davidson of Baum & Associates presented a municipal finance overview to the Monroe Common Council, reviewing the city’s fund structure, revenue composition, levy limits, and debt metrics used for budgeting and capital planning.

Davidson said property taxes constituted about 63.9% of general fund revenues and that intergovernmental revenues account for roughly 24.1% (figures presented for 2025). He noted the city used a $1,600,000 use of fund balance for a land purchase in 2025 and discussed how levy limits and net new construction affect revenue growth and the resulting need for debt-financed capital projects. “Taxes and intergovernmental revenues are by far the largest source of revenue for the general fund,” Davidson said. He also summarized debt limits tied to equalized value: the city’s 2025 equalized value was reported as about $1,300,000,000 and the legal debt limit around $64,000,000; the presenter said the city was at roughly 37.6% of that limit at year‑end.

Council members asked follow-up questions about historical shared-revenue trends and how levy limits combine with ERP factors; staff committed to providing trend data and additional one-on-one follow-ups. The session covered accounting distinctions among governmental, proprietary and fiduciary funds and explained fund balance classifications (nonspendable, restricted, committed, assigned, unassigned) used in city reporting.