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Thursday, March 29. 2007
City Council Adopts FY07 budget
During the public hearing March 19 on the 2007-08 proposed budget, City Treasurer Don Earley presented a short profile of the city.
"The real estate taxes and equalized assessed valuation of the City reflects its strong economic condition. The assessed valuation has more than doubled since 1996," he stated. He added that because of this that one of the city's main goals is the active pursuit of commercial and industrial development to "alleviate and diversify the tax base so that municipal finances can withstand any downturns in the economy."
Experiencing the benefit of the growth of West Chicago, "we are able to hold the line on our tax rate at about 42 to 44 percent per $100 of accessed valuation," he explained. "In 2001, the tax rate was 64.24 cents and with this year's levy is about 42 cents per $100 of accessed evaluation." He stressed the city's portion of the tax bill is only about 5 percent.
He explained the city's annual budget serves as a foundation for financial planning and control, prioritizes core services and administrative function, and reflects policy direction established by Council. Some of the major components of budget policy council uses are revenues, expenditures and user fees. "Revenues are conservatively projected using historic trends, reasonably expected changes in the coming years and an analysis of anticipated economic condition in the region, state and nation."
"Expenditures reflect realistic projection of anticipated costs," and are paid with current revenues.
User fees, such as general, water and sewer charges are reviewed annually "to ensure the fees cover the costs, meet debt service requirements and the operating cost of providing these services."
The proposed budget totals $36,932,800, an increase of 3.75 percent. Earley said the increase is primarily due to the Hawthorne Lane Reconstruction Project as well as other capital projects that were deferred from the current fiscal year.
The importance of the city's economic development efforts are seen "through our sales tax receipts," he stated. "Projected sales and use taxes will comprise nearly 26 percent of our operating revenues." He mentioned that City Council and staff have worked hard to attract new sales tax producing businesses, and at the same, to "maintain our existing businesses and help with their expansion."
The FY07 budget "does not recommend restoring the five unfilled positions from previous years. Since the previous budget contemplated the hiring of a part-time position to assist the Marketing and Communications Coordinator, approximately $20,00 has been budgeted to fund that position," Earley said. An additional $35,000 has been earmarked to more aggressively market the community.
He added the primary new expenditure is the City's cost associated with the redevelopment of the southwest corner of Route 59 and Main St. The amount allotted for this is $200,000.
"Two years ago, City Council earmarked revenues associated with gas use tax and electricity use tax for the Capital Projects Fund" producing approximately $2 million per year," said Earley. A structural problem revolves around the fact there is no long-term revenue source that increases with the cost of materials. "For example, it costs more to reconstruct one mile of streets now than it did two years ago. Yet the same amount of revenue is available annually for that program, meaning either fewer linear feet of street or fewer projects can be accomplished," Earley explained.
The budget includes a 3.5 percent increase in the water and sewer bill. To the average customer's bill, this will result in a net increase of about $30 per year he stated.
Early said, "The annual budget is the outcome of a great deal of hard work, dedication and effort of many people and they are to be commended for their continued stewardship of the public dollar and assistance in the development of this document."
Following the public hearing, the City Council unanimously adopted the FY07 budget at the council meeting.
Experiencing the benefit of the growth of West Chicago, "we are able to hold the line on our tax rate at about 42 to 44 percent per $100 of accessed valuation," he explained. "In 2001, the tax rate was 64.24 cents and with this year's levy is about 42 cents per $100 of accessed evaluation." He stressed the city's portion of the tax bill is only about 5 percent.
He explained the city's annual budget serves as a foundation for financial planning and control, prioritizes core services and administrative function, and reflects policy direction established by Council. Some of the major components of budget policy council uses are revenues, expenditures and user fees. "Revenues are conservatively projected using historic trends, reasonably expected changes in the coming years and an analysis of anticipated economic condition in the region, state and nation."
"Expenditures reflect realistic projection of anticipated costs," and are paid with current revenues.
User fees, such as general, water and sewer charges are reviewed annually "to ensure the fees cover the costs, meet debt service requirements and the operating cost of providing these services."
The proposed budget totals $36,932,800, an increase of 3.75 percent. Earley said the increase is primarily due to the Hawthorne Lane Reconstruction Project as well as other capital projects that were deferred from the current fiscal year.
The importance of the city's economic development efforts are seen "through our sales tax receipts," he stated. "Projected sales and use taxes will comprise nearly 26 percent of our operating revenues." He mentioned that City Council and staff have worked hard to attract new sales tax producing businesses, and at the same, to "maintain our existing businesses and help with their expansion."
The FY07 budget "does not recommend restoring the five unfilled positions from previous years. Since the previous budget contemplated the hiring of a part-time position to assist the Marketing and Communications Coordinator, approximately $20,00 has been budgeted to fund that position," Earley said. An additional $35,000 has been earmarked to more aggressively market the community.
He added the primary new expenditure is the City's cost associated with the redevelopment of the southwest corner of Route 59 and Main St. The amount allotted for this is $200,000.
"Two years ago, City Council earmarked revenues associated with gas use tax and electricity use tax for the Capital Projects Fund" producing approximately $2 million per year," said Earley. A structural problem revolves around the fact there is no long-term revenue source that increases with the cost of materials. "For example, it costs more to reconstruct one mile of streets now than it did two years ago. Yet the same amount of revenue is available annually for that program, meaning either fewer linear feet of street or fewer projects can be accomplished," Earley explained.
The budget includes a 3.5 percent increase in the water and sewer bill. To the average customer's bill, this will result in a net increase of about $30 per year he stated.
Early said, "The annual budget is the outcome of a great deal of hard work, dedication and effort of many people and they are to be commended for their continued stewardship of the public dollar and assistance in the development of this document."
Following the public hearing, the City Council unanimously adopted the FY07 budget at the council meeting.
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