Lincoln aldermen pass $19 million fiscal budget for 2017-18

[April 19, 2017]  LINCOLN -  At the Monday evening voting session of the Lincoln City Council, aldermen approved by unanimous vote a $19 million budget for the new fiscal year that will begin on May 1st, 2017 and end April 30th, 2018. Six aldermen were present for the vote, with one seat in Ward 3 being vacant and Ward 4 Alderman Jeff Hoinacki being absent for the evening.

In the $19 million figure, only $6.8 million is money expended through the city’s General Fund. The balance of the budget is special funding, such as the Motor Fuel Tax and the Sewer Department. The special funds have guidelines on how they may be spent according to state rules.

The Motor Fuel Tax is collected by the state and distributed to the municipalities. The dollars spent from that specific tax revenue may only be used on specific projects as outlined by IDOT within the city.

The state requires that the sewer systems be self-sufficient. To maintain proof of the self-sufficiency, cities must keep sewer revenues and expenditures separated from all other revenues and expenses. The money collected for sewer bills may not be given to other parts of the city budget, and bills for the sewer system may not be paid by other parts of the city budget.

The evening began with a public hearing regarding the budget. Mayor Marty Neitzel called the hearing to order and invited public participation. Wanda Lee Rohlfs came forward with questions regarding certain items included in the new budget.

Rohlfs questioned some of the changes to budget line items, noting dollars that had been moved out of one fund and into another. She noted there was $4 million moved out of the general fund and into the Capital Projects Fund. She wanted to know if that $4 million was part of the $19-million total. She was told that it was.

Rohlfs questioned the dollars budgeted for the Tax Increment Financing Fund. She said she could see that the TIF tax dollars earned this coming year would be $115,000, that there was a carryover balance from last year of $56,900, and a transfer from the General Fund to the TIF fund in the amount of $13,000 for a total of $184,900. The TIF bond payment for the year will be $173,000, and there was $10,000 put in the TIF budget for façade grants.

Rohlfs wanted to know what would happen if the city does not earn the $115,000? Where would the money come from to make the bond payment?

City Administrator Clay Johnson said the figure noted as income was an estimate received from City Treasurer Chuck Conzo. Johnson implied it should be a relatively accurate figure, and Conzo offered no comment.

Rohlfs then questioned why the city would take $13,000 from the General Fund for payment of the TIF bond and turn around and establish $10,000 to invest in façade grants? She felt that the façade grant could be done away with and reduce the amount coming out of the GF and into the TIF.

Johnson responded that during the budget talks in March the aldermen had indicated that they wished to continue offering the façade grant to downtown businesses. He had, therefore, added the $10,000 they requested. Rohlfs response to Johnson was not entirely audible, but paraphrased was something to the effect that she supposed then that she was taking issue with the council. Rohlfs then left the speaker chair.

Neitzel asked if anyone else wished to speak, and getting no response closed the hearing.

The city had held budget talks on two separate special meetings in March. The façade grant was part of the discussion at that time.

In addition, during those talks, Tracey Welch asked that the city find money to dedicate to a workforce education program being administered by the Community Action Partnership of Central Illinois. In response, $30,000 was added to the Capital Projects Fund for that expenditure.

Other items discussed during budget talks included the need for the city fire department to purchase a new ladder truck. The truck will cost more than $1,000,000 because it has to be a special order to accommodate the size of the building where it will be stored. During that topic discussion, Rick Hoefle wondered if the city should be doing things differently. He wondered if the city could build a storage building that would accommodate a standard size vehicle, and would that, in the long run, be the most cost-effective plan. The aldermen discussed that at length, realizing that the building would be cheaper than a special order truck, but there would also have to be land acquisition, and located in the downtown area, there would be significant expense in giving the building the appropriate façade to go along with the guidelines of the city’s Historic Preservation Commission.

During the March discussions, Michelle Bauer noted that there was no money in the draft budget for continuing the downtown streetscape program.

Baurer suggested that the city budget dollars to do the design study for the three remaining blocks of the downtown square. This also brought about quite a bit of discussion as aldermen are still concerned about the current condition of Pulaski Street and have a strong desire to rectify the problem with the bump-outs at the corners of the street.

Later in the evening on Monday night, Johnson would present a budget summary. Included in that summary was an amount designated for the design study. He noted that the study was still something the council would have to discuss and decide on whether or not to move forward.

In the new budget, there will be no purchase of squad cars for the police department as the city adopted a new squad replacement policy last year that includes multiple purchases on a less frequent basis.

In contrast, there will be money in the budget for a payment on a loan or bond issuance to cover the cost of renovating the Jefferson School into a police station. During his presentation on Monday evening, Johnson said the council would need to research and decide on the best means of financing for the police station.

The budget does include financing the purchase of a vehicle for the street department, at the request of Street Superintendent Walt Landers. In addition, Landers had asked for the addition of one more employee for the street department, bringing the total to nine.

During the March meetings, it had also been discussed that the city should perhaps increase its contribution to the Police and Fire Pension funds above and beyond what has been gained through the utility tax. Monday evening Johnson said that the new budget included $100,000 from the GF to go into the pension funds.

At the same time, the budget did not include the ninth employee for the street department. Johnson said that the council would need to discuss this further and decide which it wanted to do pay, the pension fund or hire a new employee.

The payroll increases in the new budget are 2.75 percent for the police department and 2.5 percent for streets and alleys and the fire department. These are union negotiated amounts that the city must pay. Johnson explained that the budget had a 3 percent increase included for non-salary employees. The figure is put in to cover any raise the city might choose to give non-union employees, but that also is a decision to be made at a later date.

In the Capital Projects Funds, it was noted that $2.7 million designated for the Lincoln Depot is a “pass through” the city will pay and be reimbursed by the High-Speed Rail Program for the completion of the depot renovation.

Johnson explained other items in the Capital Fund including $60,000 to replace the Jefferson Street Bridge. The bridge has failed IDOT inspections, so the city has no choice but to replace this bridge, just as they had no choice but to replace the State Street Bridge.

Two other IDOT related expenditures are in the Capital Fund. There is $150,000 tagged as an Extension to Short 11th Street. This project will build an intersection into Lincoln Parkway at Stahlhut Drive, connecting Short 11th Street to the Parkway.

The second IDOT project will cost $72,795 and is for lighting improvements for the intersections with Lincoln Parkway at Fifth Street, Stahlhut Drive, and Woodlawn Road.

Johnson explained that these IDOT projects are shared cost projects. The lighting improvement project, the city has little choice but to pay. For the 11th Street project, Johnson reported earlier this month that there are other private entities involved in this project such as Abraham Lincoln Memorial Hospital and Christian Homes/Christian Village. Aldermen determined that while they could have opted out of that project, it would not be right for them to do so; they needed to bear their fair share of the costs.

In Johnson’s presentation, he also offered pie charts explaining the percentage of dollars received into the GF from certain taxes, and how the money in the GF is paid out according to specific expense lines.

 

Property taxes paid in Logan County have been a topic of discussion in council chambers for quite some time now. Johnson’s pie chart showed that the percentage of the total property tax collection by the county going to the city is only about 13 percent. The largest share of the tax collection goes to District 27 schools and the Lincoln Community High School. Between the two, 59 percent of the property taxes paid by Lincoln homeowners goes to the schools.

The revenue sources for the city of Lincoln that go into the GF are made up of a variety of tax collections. Johnson presented a pie chart showing that the lion’s share of those revenues is coming from municipal sales tax and state income tax. The piece of the total pie that is brought in from property taxes amounts to only about 11 percent.

Another pie chart illustrated that 50 percent of the GF expenditures would go to public safety and includes the payroll for city workers as well as payroll insurance.

When Johnson completed his presentation, Neitzel asked if there was any discussion regarding the budget. With no one speaking up the vote was taken and the 2017-18 Budget passed unanimously.

[Nila Smith]