Elgin 2011 projected deficit might turn into a surplus

A projected 2011 budget deficit of $1.74 million in Elgin’s general fund doesn’t seem to have panned out.

Preliminary numbers for Elgin’s total revenues and expenditures, reported to bond rating agencies, show a $1.26 million surplus in the general fund. Auditors are working to confirm those numbers now and City Manager Sean Stegall said actual year-end numbers should be ready in the next month.

Stegall said sometimes audits don’t result in a change to the final numbers at all, but sometimes the changes are substantive.

“It would be irresponsible of me to comment on numbers that don’t exist,” Stegall said.

Chuck Keysor, co-founder of Elgin OCTAVE, a group advocating against new taxes among other things, spoke at Wednesday’s city council meeting after seeing a copy of the city’s unaudited financials.

He said the surplus indicated new taxes set to take effect this year and layoffs in January were premature.

Pointing to suggestions by Councilman John Prigge during the city council’s budget discussions, Keysor said it would have been better to wait to raise taxes until after a budget shortfall actually happened.

Prigge said Thursday his plan would have done just that, setting up a “contingency plan based on facts and not projections.”

Prigge voted against new utility taxes but voted for a .5 percentage point sales tax increase and a 3 percent alcoholic beverage tax for the 2012 budget.

Stegall said he does not have any concern that the layoffs and tax increases were the wrong decision. He said the fundamental point, regardless of the final numbers, is that the budget decisions for this year were based on fixing a long-term structural deficit — actions that earned the city a AAA bond rating from Fitch.

If the city’s final revenues are significantly higher than expected, Stegall said the city council could always choose to lower the property tax rate to stabilize the general fund.

“There’s never going to be a period where we’re sitting on giant surpluses,” Stegall said. “That’s just not the nature of how we do it or the nature of what the community would accept.”