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Elgin budget may allow hiring in 2015

For the first time in years, the city of Elgin might consider beefing up its staff levels and possibly enter into long-term debt to fund capital projects, depending on the wishes of the city council.

City Manager Sean Stegall said the 2015 budget - which he'll first present to the city council Nov. 12 - will be a conservative, maintenance budget based on "a fundamental disbelief" in the recovery of the economy.

The 2015 budget will be balanced, but details such as taxes and fee levels are still being worked out, Stegall said. The city's 2014 budget accounts for about $280 million in expenses.

Residents can give their input about what the city should "start doing, continue doing or stop doing" at round-table budget sessions later this month, Stegall said.

The sessions will be at 6:30 p.m. Oct. 23 at Gail Borden Public Library, 270 N. Grove Ave., and Oct. 28 at Prairie Knolls Middle School, 225 Nesler Road.

Staff members will be especially focused on "helping people understand the resource challenges that all cities face," Stegall added.

Additionally, there will be a public hearing, likely on a Saturday in November, during which residents can sound off about the proposed budget to city council members.

In the last couple of years, Elgin has seen an increase in sales and income tax revenues, a slight increases in property tax and permit fee revenues, and a decrease in telecommunications fees, Stegall said.

Particularly concerning is the decline of the city's share of revenues from the Grand Victoria Casino, from a peak of $27 million in 2007 to an estimated $10 million this year, or $2 million short of projections, he said.

The riverboat fund, which used to fund a variety of special projects, mostly is dedicated to basic expenditures such as street improvements and vehicle purchases, he said.

"For my entire tenure, we've been operating with low staff compared to other communities," he said."Since the Great Recession, we've been operating with very lean staff."

The city continues to grow, which inevitably puts a strain on staffing levels, Stegall said. The city last laid off workers in January 2012.

"Midlevel management was decimated, so as more senior staff members retire or leave, there isn't a pipeline of people to replace them," he said.

Elgin's chief financial officer quit in June, and an active search for a replacement will be underway in a couple of weeks, Stegall said. The city is also conducting interviews for a communications/marketing director, whose salary was budgeted for this year.

If council members want to fund capital projects - such as rebuilding of streets or possibly major repairs to Civic Center Plaza - this would be "an optimal time" to enter into long-term debt given current low interest rates, Stegall said. Debt cannot be issued for maintenance expenses, he added.

The city last issued debt in 2013 for water and sewer capital improvements, Stegall said.

Elgin currently has "incredibly low debt," Stegall said. Debt ratios are calculated based on comparisons with other municipalities and population size, he said.

According to Fitch Ratings, the city had about $84.5 million in outstanding general obligation bonds with a AAA rating in early 2013. The city has a AA-plus bond rating from Standard & Poor's, he said.

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