 Monday evening, even though she has been with the city only a few
weeks, city administrator Sue McLaughlin presented to the council
her first draft of a budget for the fiscal year 2013-14.
The city's fiscal year begins May 1. In years past, the typical
process for building a budget has included two special Saturday
sessions in March, lasting a minimum of four hours, and often
additional one-hour sessions throughout the month of April.
During those sessions, aldermen heard from their community
partners about financial assistance they would hope to receive
during the year. They also heard from each of the department heads
who had drafted their own "wish list" budget.
In recent years, Mayor Keith Snyder has done some early work with
the department heads, asking them to prepare figures that would
reflect what they want for the coming year, and then a second set of
figures that would reflect where and how they can cut back in order
to live within a cash-strapped budget.
At the special meetings, council members would discuss the
various requests and needs and take to the draft budget with red ink
pen in hand, cutting out all that was deemed as something the city
could get by without, for at least another year.
None of that happened this year, at least not with the council.
Instead McLaughlin, filling the role as her job description
required, met with department heads and hashed through putting
together a budget.
At last week's committee of the whole meeting, she advised
aldermen that a binder would be left on their desks on Thursday that
would spell out the finite details of the draft, and on Monday she
would make a presentation of her findings on the budget.
Monday evening McLaughlin presented a 40-minute PowerPoint
discussion of her perception of the city's finances.
The budget process focuses primarily on the money that goes into
the city's general fund. This is money the city can use as they see
fit.
While the total budget of the city averages around $14 million
per year, approximately half of that is in restricted balances.
Those restricted balances basically mean that while the money is in
the bank, it can be used only for specific expenses, and even if the
city desperately needs the money somewhere else, the restricted
funds can be expended only according to state or federal rules.
An example of this is the motor fuel tax revenues. That money,
brought into the city through fuel tax, can be used only for road
projects, and even then, not all the streets in the city can have
repair work paid for by these funds.
General fund balances, generally speaking, pay all the payrolls,
finance the police department, fire department, city clerk and
administration offices, finance the pension plans, and cover costs
not covered by other funds, such as some street projects and
sidewalk replacements, just to name a few.
For the most part McLaughlin's discussion focused on the general
fund budget for next year, but she did also touch on some issues
with the sewer department.
Among the many slides in her presentation, McLaughlin offered an
overview of the last five to six years of general fund revenues and
expenditures. She showed the council that over the last five years,
they have done a pretty good job of keeping expenses below revenue,
in spite of having a very tight budget in the 2011-12 year. She also
showed that in the draft budget, the city is going to have expenses
exceeding revenue in the new fiscal year by a little over $80,000.
[to top of second column] |
She told the council she would not normally present a draft in
this manner, but she wanted them to see where they were and realize
what they can do to resolve the situation.
Another slide showed the increase in sales tax revenue over the
last six years. The incline has been minimal, with total revenues
from sales tax being $2.563 million in 2008-09 and projected to be
$2.81 million in the coming year.
The same was true with the non-home-rule tax, with the 2008-09
figure being $739,429 and the projected figure for next year being
$783,539. The slide also reflected a significant dip in 2009 to only
$457,628.
McLaughlin showed that over the last four years, revenue from
income tax has grown somewhat, but she also told the council there
are concerns about this revenue stream. She said the governor has a
proposal on the table right now to freeze income tax revenue to
municipalities at the current rate. If this occurs, when residents
of Illinois make more money and pay more taxes, the state will be
the only one to reap the benefits. The money will not trickle down
to municipalities.
McLaughlin said she didn't know how this would play out, and she
noted that it seems the governor changes his mind on a daily basis
on how to resolve the state's deficits. She also added she'll be
attending a meeting of city administrators hosted by the Illinois
Municipal League, and she hopes to hear there if the league believes
this particular plan "has legs."
Getting down to bottom-line figures, McLaughlin shared that the
projected revenues for the general fund next year are $8,158,790,
with projected expenditures being $8,238,856, making a shortfall of
$80,066.
She touched on some of the larger tickets in the annual
expenditures. General government -- which includes payments for the
city attorney, engineering costs, city clerk, city administrator,
the building and zoning office, the merit commission and city
council -- will eat up $591,971 of the annual budget. Of this, 66
percent will go to the three City Hall offices: building and zoning,
city clerk, and city administrator. The city attorney will take up
14 percent and the city engineer will take up 12 percent. Dollars
paid to city council members and the merit commission will make up
the final 8 percent.
Combining all personnel costs, the total expenditure next year
will come to $5,164,384, or 63 percent of the total revenues brought
in.
This is the portion of the annual budget that really cannot be
changed all that much. As has been reported for the last several
years, the police, fire and street departments are being manned by a
bare-bones staff, as is the city clerk and building and zoning
office. Pensions must be paid, as well as insurance, and union
negotiations generally include increases in wages for all city
employees. In addition, no one is predicting that any of these costs
will go down on their own; basically everyone knows they will
continue to go up.
The conclusion of McLaughlin's discussion will be covered in the
Friday edition of LDN.
[By NILA SMITH]
 |
