The Elgin City Council examined potential spending cuts and revenue increases Saturday as it deals with losses in state funding while trying to avoid dipping into reserves to balance the budget.
City Manager Rick Kozal asked staff members for a 5-percent cut scenario for each department, along with ideas for fee and tax increases, at the committee of the whole meeting. A proposed 2018 budget is expected Nov. 1.
A 5-percent reduction amounts to laying off 15 police officers out of the current 182, but that shouldn't come from patrol, Chief Jeff Swoboda said. The department used to have more than 190 officers and has achieved a 44-year low in crime with an increased population, he pointed out.
"We have to be careful that we don't punish for success," Mayor David Kaptain said.
Fire Chief Dave Schmidt said a 5-percent cut would mean reducing daily staffing from 34 to 30 firefighters, which would be his preference, or laying off three firefighters and decreasing daily staffing to 32. The fire department also could bill more for emergency medical and related services, he said.
Councilman Terry Gavin said he'd advocate for a 2.5 percent cut to expenses and 2.5 percent increase in revenues. "The mantra is a balance between cuts where possible, without affecting core services, and revenue enhancement," he said.
Police and fire are the largest components of the $118 million general fund, at $41.6 million and $29.6 million, respectively.
Elgin balanced the 2017 general fund with $3.5 million from reserves. Chief Financial Officer Deb Nawrocki said the city is expected to lose an estimated $1 million -- half this year, half next year -- from its share of income taxes. A 2-percent service fee imposed by the state on the collection of sales taxes is an anticipated loss of $225,000, and a decrease in personal property replacement taxes is an estimated loss of $302,000.
Senior management analyst Aaron Cosentino said revenue options include:
• A property tax increase yielding $1 million; the average household would pay an additional $23 per year.
• A 4-cents-per gallon tax on motor fuel for $1.6 million.
• A $50 vehicle registration fee for about $2.5 million.
• A real estate transfer tax at $3 per $1,000 of property sold for an estimated $1.45 million.
• A food and beverage tax of 1.25 percent, or an extra $1 million to $2 million.
• A 0.25 percent sales tax increase yielding $2 million.
Other options are a 1-percent cigarette tax, a business license fee between $35 and $500 based on square footage, a 1-percent liquor tax increase, and a 2-percent hotel/motel tax increase.
Interim Public Services Director Kyla Jacobsen said a 5-percent cut could be achieved by laying off seven people, or scaling back on overtime costs for snow plowing and eliminating on-street leaf collection.
Parks and Recreation Director Randy Reopelle said his department couldn't achieve a 5-percent cut without closing a facility. He presented data showing Elgin has competitive recreation facilities and programs while spending less per capita compared to Bartlett, Dundee Township and others.
Cultural arts has a budget of about $1 million and costs about $29 per household, and brings in lots of visitors for events at the Hemmens Cultural Center, which is rented 94 percent of weekends, special events and community engagement manager Barb Keselica said.