APPLETON (NBC 26) — The City of Appleton could lose an estimated $310,000 in state transportation funding after failing to meet a financial reporting deadline — a costly mistake that has raised questions about city leadership, spending priorities and how the money will be replaced.
City officials say staff turnover and outdated financial systems contributed to delays that caused Appleton to miss the July 31 deadline.
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But District 13 Alderperson Sheri S. Hartzheim says the problem goes beyond the missed paperwork. She's also frustrated by what she describes as a lack of communication with the Common Council.
"If the general public thinks you haven't heard enough about what's happening with this, the council hasn't, either. And that's disappointing to me," Hartzheim said.
What led to the potential $310,000 penalty?
In a statement to NBC 26, the Wisconsin Department of Revenue confirmed that Appleton failed to submit two required financial documents by July 31: an auditor's opinion and its Annual Comprehensive Financial Report.
Under state law, municipalities that fail to meet the reporting requirements face a 10% reduction in their General Transportation Aid.
The Department of Revenue says that while it oversees financial reporting requirements, the Wisconsin Department of Transportation is responsible for notifying municipalities of any penalty. The Department of Revenue also says it has no authority over the penalty or appeal process.
For Appleton, that reduction could amount to approximately $310,000 in state funding intended to help support transportation needs.
"That's a leadership failure," Hartzheim said, criticizing the city's handling of the situation.
Will Appleton's road projects be affected?
Despite the potential loss of transportation funding, city officials say residents should not expect road construction projects to be cut.
Appleton Public Works Director Laura Jungwirth says the department is moving forward with its planned work.
"And at this point in time, we are not planning on scaling back on any projects," Jungwirth said.
That includes concrete paving planned for Badger Avenue next year.
Mayor Jake Woodford has proposed using city reserves or unspent budget funds to help cover the potential shortfall, rather than reducing planned road improvements.
But Hartzheim questions whether those funds should be used to make up for a missed deadline.
"If there's excess funds there, those should be for the taxpayers," Hartzheim said.
Her concern is that money being considered to cover the penalty could otherwise have been available for other city priorities or taxpayers.
Taxpayers weigh in on city spending
The potential financial loss is also adding to broader concerns about how Appleton spends taxpayer dollars.
Appleton resident Michael Connell says he wants city leaders to focus spending on essential needs.
"They spend the money on things that don't need to be done, and they ignore the things that need to be done," Connell said.
While Connell's concerns extend beyond the missed audit deadline, the possibility of losing hundreds of thousands of dollars in state funding raises questions about how the city prioritizes its resources.
What happens next?
Appleton is working to address the problems officials say contributed to the missed deadline.
The city is bringing in outside consultants to help modernize its finance department, improve financial reporting processes and reduce the risk of missing future deadlines.
City officials are also exploring whether the penalty can be appealed.
For now, the estimated $310,000 reduction remains a potential financial setback, with city leaders working to prevent it from affecting planned road projects while addressing the reporting problems that led to the situation.
