The implications of a 2006 report naming West Salem as one of just two debt-free Wisconsin municipalities may come back to haunt the village, or at least its cash-strapped fire protection district.

“We’re kind of paying for it because we’ve been too tight,” said village Trustee Merlin Wehrs, who serves on the West Salem Fire Protection District Board.

Wehrs said that by keeping levies low, the village has limited WSFPD’s ability to set budgets that keep pace with inflation.

The 2006 Wisconsin Taxpayers Alliance report indicated West Salem and the city of Stanley were the only debt-free municipalities in the state. The report also said that although the property tax freeze was meant to hold down levy growth, the loophole allowing municipalities to grow levies at the rate of new construction has kept overall tax levy increases at approximately 4 percent.

The 2005 state-imposed levy limits allow municipalities to increase their levies by no more than 2 percent or the percentage change property value increases due to new construction, whichever is greater.

Any levy increases above those percentages would need to go before the voters.

Lower levies prior to 2005, argues Wehrs, in effect punished conservative municipalities like West Salem.

Next week the village will consider putting a referendum on the November ballot asking voters to approve a $116,343 levy increase to cover the WSFPD’s budget.

That amount, said Village Administrator Teresa Schnitzler, marks a 12 percent increase over last year’s fire protection levy. The fire district asked for $86,933 in the previous budget cycle.

“The increase is because we had to cut because of the levy limits,” Wehrs said.

A string of events have led WSFPD to ask for a combined $388,531.21 from West Salem and the towns of Barre and Hamilton. The first was the adoption of an 18-month budget in this cycle to align itself with the calendar year budgets used by the municipalities.

Payments on a pumper truck loan and another loan to remodel the fire station totaling $115,132.59 and $94,000 in short-term borrowing used to cover the realignment further compound the financial crisis.

The WSFPD, a separate entity from the volunteer fire department existing exclusively to fund its costs, spent $180,000 on the recent remodeling project, $125,000 of which was borrowed.

“Until that remodeling project, we didn’t have a problem,” Wehrs said.

Defending the decision to remodel, Wehrs said that as West Salem approaches the 10,000 population mark, it will need some full-time fire fighters. Having an updated fire station will become necessary at that time, he said.

The Wisconsin Department of Administration estimates West Salem’s population in January 2008 at 4,852.

As is the case with the village of West Salem, fire district board members are aware that the referendum might be the only way to obtain the bulk of its total $410,057.81 in the 18-month budget.

The towns of Hamilton and Barre are being asked to pony up $141,575.28 and $62,293.30, respectively. Given their equalized values are $216.1 million and $95.1 million, respectively (West Salem’s is $281.9 million), the bulk of additional funding from the towns will likely need to come through referendum.

When asked if Hamilton had room in its budget for WSFPD’s request, Town Clerk Jeanette Hoyer replied, “No, we do not.”

Hoyer said the amount requested is more than double the fire protection district’s requests in the past two years, $61,589 in 2007 and $62,566 in 2008.

Even if the town increased its levy 2 percent and turned the entire increase over to WSFPD, the amount still wouldn’t be enough.

“If they take up our 2 percent, there’s no room for any other increases,” Hoyer said.

She said she has no requests from WSFPD in writing as of Tuesday. A special town of Hamilton meeting is scheduled for Wednesday with the town legal advisor regarding the issue.

The need for WSFPD to dip into savings as it did last year, borrowing $60,000 from an equipment savings account to cover loan payments, has hamstrung future projects.

“Our cash flow isn’t there now,” Wehrs said. “If we don’t do something it’s going to keep snowballing on us and we can’t let that happen.”

At its upcoming West Salem Village Board meeting Sept. 2, all options are on the table regarding the referendum. Board members could vote to increase or decrease the amount to be levied or scrap the proposal altogether.

Asked for her best guess on how either the board or the voters will react to the referendum, Schnitzler said she didn’t have a sense of either.

Schnitzler said if the issue goes to referendum and the electorate votes no, the issue would go back to the municipalities to find other ways to pay. In tight budget times, further cuts would be deep.

As to the idea to begin charging for fire calls, as Schnitzler pointed out, the roughly $5,000 per year amassed by charging for calls is a drop in the bucket compared to its nearly $400,000 budget request.