Elgin looks at helping nonprofits, braces for own cuts

Elgin is taking the lead in trying to help nonprofits navigate Illinois' fiscal crisis as it starts to grapple with the “99.9 percent” likelihood it will have to slash its own expenses due to state revenue cuts.

The Elgin City Council took a first look during a special meeting Saturday at a list of nearly $2 million in “discretionary” services it could consider cutting.

That includes a wide array of items, such as the city's newsletter, diversity consulting, movies in the park, staff training, the Fourth of July parade and funding for the Elgin Area Convention and Visitors Bureau, the last item being the most expensive item on the list at $212,000 per year.

The term “discretionary” is relative, Councilman John Steffen said.

“If we cut all of this, we could get away with it for two, three, five years. But the long-term effect on the city would be disastrous,” he said, later adding, “I think the residents refuse to be a city of nothingness.”

City Manager Sean Stegall said there is a 99.9 percent likelihood the state will cut local municipalities' revenues.

If the state cuts 15 percent to 20 percent of the city's share of income taxes, that would be a loss of about $1.9 million to $2.5 million per year, Assistant City Manager Rick Kozal said.

The city's $288 million budget includes 30 funds, the largest of which is the general fund at $120.6 million. It pays for day-to-day operations and core services such as police, fire and public works.

Without cutting core services, there is little wiggle room for large cuts, Kozal said.

“The sense that there is a lot (of money) to play with, I think these numbers demonstrate there isn't,” he said.

The city does have about $40 million in reserves, which speaks to its financial health, he said. However, any long-term state funding cuts need to be addressed with structural changes to the budget, not by plugging holes in the short term, city officials say.

Mayor David Kaptain exhorted fellow council members to figure out their priorities for the 2017 budget.

“I want the council to think about, over the next few months, what they really think core services are,” he said. “Some of these are quality of life issues.”

Councilman Rich Dunne said the city could look at delaying future construction projects and find corporate sponsors for community events.

Helping nonprofits

Kaptain also disclosed a plan to create a “universal grant form” for agencies and organizations that fund nonprofit groups and to establish a centralized information technology system for nonprofits to efficiently serve clients in need.

The new system would be supported by software with appropriate firewalls to deal with federally mandated patient confidentiality, Kaptain said.

Elgin Township and two private foundations are on board, Kaptain said. The police department would use the system for its social services unit that serves 800 to 900 people per year.

“Our vision is to create a sustainable infrastructure for not-for-profits, free up resources and allow them to do what they do best — and that's to serve their clients,” he said.

Kaptain said it's too early to say how much this would cost. He suggested using video gambling money, or about $100,000 per year.

On the flip side, the city would stop funding individual grants for nonprofits and devote its resources to the new initiatives, Kaptain said.

Councilmembers Terry Gavin, Tish Powell and Dunne said they liked the idea. Dunne proposed cost-sharing with neighboring municipalities, such as South Elgin, East Dundee and West Dundee, whose residents are clients of the same nonprofit agencies.

But Councilman Toby Shaw said that supporting nonprofits is an individual decision.

“I like the idea of nonprofits in Elgin coming together, I think that's a great idea,” he said. “But the city of Elgin leading the effort? That's where, I guess, I'm a little bit concerned.”

Councilman John Prigge proposed asking nonprofits to contribute volunteer hours to city events such as the Fourth of July parade and Nightmare on Chicago Street.

That's unrealistic because nonprofits already heavily rely on volunteer work, Steffen said.

Kaptain said he plans to present more details to the city council in a few months.