Monday, April 21, 2014
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City's new fiscal year budget goes from red to black ink

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[April 21, 2014]  Tuesday evening, city administrator Sue McLaughlin presented the Lincoln City Council with the final copy of the budget for the next fiscal year. The city's fiscal year will begin on May 1, and a reconciled budget must be in place by that date.

At the April 7 meeting, the budget was presented in draft form and showed that there was a $250,000-plus deficit in the general fund. The draft had been put together using best-case scenarios from the various city departments. McLaughlin walked through some of the details of the budget and told aldermen that she would be working directly with department heads to see how they could trim the budget for the coming year.

On Tuesday evening, she presented a final copy that actually brought the general fund out of the red and into black ink in the amount of $14,497.

The total budget for the next year is in excess of $29 million, with approximately $20 million being in restricted funds. The restricted portions of the budget are those dollars that are required by law to be used for specific purposes, such as the motor fuel tax, which can only be used for infrastructure, or the general obligation bond, which can only be used for qualified expenses such as buildings or equipment.

The largest portion of the general fund budget is used to cover workers' wages and fringe benefits, along with administrative costs, such as telephone bills, office supplies and general office expenses.

In discussing the changes made to balance the budget, McLaughlin said there were a couple of personnel requests that could be delayed to save the city money. She spoke specifically on Tuesday night about waiting until later in the year to hire a new police officer.

At the earlier meeting, she had also suggested the city wait three months to hire a new public works director. Muzaffar Lakhani was hired in November to fill this newly created position for the city. However, he resigned the position in late January or early February, and to date has not been replaced.

Much of the discussion regarding the new budget revolved around compensation for one employee in the city clerk's office. City Clerk Susan Gehlbach had requested raises for her deputy, Joy Funk, as well as the sewer billing clerk, Dawn Crowell. In the budget, both were given their raises. Gehlbach said that in requesting the raise for Funk, she had contacted other city clerks and inquired about the annual income for their assistants. She found that Funk's pay was a great deal less than what other cities paid. The raise Gehlbach requested for Funk would still be less than what other cities pay, but would bring the pay closer to being in line with the norm.

Gehlbach had also asked for a significant raise for Crowell. All the aldermen agreed that Crowell has done a great job for the city and is more than deserving of the increase. However, the problem arose when it came out that the increase was more than what is mandated for this year by the union Crowell is in.

Melody Anderson said she was not going to be able to support that. She indicated that she believed completely that Crowell deserved the increase, but that it would "open a whole can of worms" for the city regarding other union employees.

In the general obligation bond, expenses were moved from the general fund to the 2010 general obligation bond for the purchase of guns for the police department, a new computer server, a new audio system for the city council chambers and for building repairs. The bond had a beginning balance of $100,871 for the new fiscal year. If all these expenditures occur, the city will end the year with $872 remaining in that fund.

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The city also has their 2013 general obligation bond, which was moved into the capital projects fund. That fund is currently running in the red, with a total shortfall estimated to be $43,294. Included in the revenues are grant dollars for acquisition of property for work on Fifth Street Road, state dollars for the Lincoln Depot and a grant for work at the Apex at City Center.

Included in the expenditures in the capital projects fund are dollars for street repairs and resurfacing projects, which will be done in the new fiscal year.

There are also dollars for the new street garage. The budget is calling for a total expenditure of $4.2 million, with an anticipated reimbursement from Commonwealth Edison and Nicor Gas of $4.1 million.

There is $160,000 in the budget for the Apex. Anderson said she wanted to stress that none of this is city money. The city received money for the sale of the parking lot at the former Abraham Lincoln Memorial Hospital site when they sold it last year to developers. That came to approximately $40,000. The balance of $120,000 would come to the city through a Park and Recreational Facility Construction grant from the Illinois Department of Natural Resources.

She added that if nothing happens at the Apex this year, then the $40,000 alone would bring the capital projects fund close to balancing. McLaughlin added that some of the projects funded by grants won't be done until the grant is actually awarded. She also said she wasn't as concerned about this red ink as she would be about others because there are projects that don't have to be, or may not be, completed in the new fiscal year.

Included in this list, beyond street repairs that will be done, is $85,000 for brick road repair, $108,000 for decorative lighting and $15,000 for other community improvements.

Some of the biggest hurdles in the new budget are the increases in wages, health insurance, property insurance, vehicle liability and workers'  compensation insurance.

McLaughlin said she does have plans to do a complete review of the workers' compensation. Premiums for these policies are based upon job descriptions, with higher costs for jobs having higher risk for injury. McLaughlin said she would review the policy to assure that employees were being placed in the correct risk definition.

The budget will be on tonight's voting agenda. The budget may be tabled if aldermen are not ready to cast their vote. If that should happen, then the city would have to call a special adjourned voting meeting on April 29.


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