Tuesday, Dec. 3

 

No easy solutions for
city's budget crunch

[DEC. 3, 2002]  Problems concerning the city's budget crunch were on the agenda Monday night at the Lincoln City Council meeting, but no easy solutions were in sight.

The one-half of 1 percent sales tax increase that voters turned down in November will be back on the ballot April 1, and aldermen discussed ways to sell the idea to voters the second time around.

Alderman Michael Montcalm opened the discussion by offering to contribute $100 of his own money to print fliers and otherwise publicize the upcoming referendum and by asking other city officials to do the same.

"Are we going to try to do it, or are we going to go on spinning our wheels?" he asked.

Because it is against the law to spend city funds to promote the referendum, aldermen have previously discussed raising money on their own. Most also believe the public is not well enough informed about the tax increase, which is estimated to add about $550,000 per year to the city's revenue.

"People's biggest concern is what is the money to be spent for," Montcalm said.

By Illinois law the money must be spent for infrastructure, such as road and bridge work. The city has no money in the budget right now for road repairs.

 

Several other aldermen and Mayor Beth Davis agreed to contribute to a publicity fund.

"If we as the city are asking the public to give, we have to give too," Bill Melton said. "We also have to show the public we're going to cut as much as we can possibly cut," he added.

City Attorney Bill Bates told the council that making personal contributions isn't as simple as it sounds. If contributions reach a certain level, such as $500 or $1,000, forms must be filed with the state of Illinois.

Alderman Steve Fuhrer, head of a newly appointed committee to educate the public about the 0.5 percent increase, asked Bates to check on the legalities of using personal funds and said he would be calling for a meeting of the committee soon.

Alderman George Mitchell asked how soon the city would see the new tax money if the referendum is passed.

Les Plotner, city treasurer, said even if the referendum passes on April 1 of 2003, the tax won't go into effect until January of 2004, and the city will not see any money until April of 2004.

Plotner had little good news for the city when he gave his financial report for the first six months of the current fiscal year, May 1, 2002, to April 30, 2003. The report showed how the city's income from various sources has dropped this year compared with previous years.

Income from shared revenue sources -- income tax, motor fuel tax, state use tax and photo processing tax -- dropped in fiscal year 2001-2002 and is projected to drop further in the next two years. The photo processing tax is no longer being received by cities and now goes into state coffers instead, Plotner said.

 

In 2000-2001, the city received $1,856,818 from these four sources. In 2001-2002, receipts dropped to $1,714,535. Projections show 2002-2003 revenue dropping again, to $1,616,511, possibly rising slightly to $1,639,103 in 2003-2004.

Income from the corporate personal property replacement tax also dropped in the first six months of the current fiscal year. Through October of 2001, the city had received $122,630.75, but this year it has received only $87,270, almost 30 percent less.

Income tax revenues have also dropped in the current fiscal year by 2.45 percent, from $1,098,282 for 2000-2001 to $1,009,892 for 2001-2002. Plotner estimates a greater drop for the next fiscal year, almost 15 percent.

 

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Perhaps the most startling news in Plotner's report was the difference between the funds the city expected to earn from its investments and the amount it is actually receiving. Historically low interest rates have cut the amount earned in the first six months of the fiscal year to $18,203, only 21.4 percent of the estimated $84,950 that was projected.

The treasurer's report held one bit of good news.

"If there is one bright star in the revenue picture, it's our sales tax receipts," he told the council. "They are actually up about $13,000, or 1.49 percent, for the first seven months of this year."

Last fiscal year, May through November sales taxes received were $1,100,839, while this year they were $1,113,496, he said.

Plotner also said that because interest rates are so low, the city might have to dip into the fire and police pension fund principal to pay current pensions before the year is out. "This is not a pretty picture, and it is not going to go away," he said.

"The finance committee is going to have a difficult time dealing with the budget next year. They may have to think about some service cuts," he said.

The finance and ordinance and zoning committees approved next year's combined tax levy of $1,414,642.90, which includes $1,241,872.90 for the corporate and special purpose tax levy and $172,770 for the proposed debt service levy for the general obligation bond. A public hearing on the tax levy was set for Tuesday, Dec. 10, at 7 p.m., and the levy will be on the agenda at the next regular meeting Dec. 16.

 

In other business, the council approved several ordinances and resolutions. The property at 416-422 Woodlawn Road, belonging to the Glenn Buelter estate, was rezoned from R-2 (residential) to C-2 (commercial). Jim and Shelley Horn of J & S Auto Centre plan to construct a new building on the site.

The council also approved the second phase of the sewer rate increase, raising residential rates from the current $14 per month to $16.43 and raising rates for commercial, industrial and institutional users based on their use. The increase was necessary to secure the $9.8 million loan from the Illinois Environmental Protection Agency for the sewer plant upgrade. New rates will go into effect July 1, 2003.

The council voted to make Ottawa Street between Union and Broadway one way going north, to help make the area safer for school children when the new Central School is completed. They also approved increasing the number of members on the Lincoln Planning Commission from 10 to 11. Mayor Davis said she would present a name for appointment to the 11th spot soon.

Police Chief Rich Montcalm told the council the Lincoln Police Department has received a $10,000 grant from Monsanto Seed Company of Mason City to continue its Youth Violence Prevention program. The Lincoln department was one of several that applied for the grant, and its program merited receiving the entire amount available, Montcalm said.

Fire Chief Bucky Washam reported that the fire and police departments have been conducting interagency training for dealing with major disasters. He said it is the first time the two departments have worked together on such a project.

[Joan Crabb]

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