Elgin's proposed 2018 budget includes cuts of $1 million, mostly in firefighters' overtime costs, and $4.2 million in additional revenue from a new gasoline tax and increases to sales and hotel/motel taxes.
City Manager Rick Kozal unveiled the proposed $258 million budget at Wednesday's city council meeting. The plan is to use $876,000 from reserves to balance the $116.4 million general fund budget, which pays for day-to-day expenses and is 1.4 percent lower than this year's general fund budget.
Wages and pensions are the main drivers of increased costs, Kozal said. The goal is to maintain current services -- which a recent survey showed most Elgin residents are satisfied with -- "without being too onerous" on the typical household, Kozal said.
The budget document released Wednesday doesn't give the total proposed property tax levy, but it states the general fund levy would stay flat at $27.8 million while the levy for police and fire pensions would increase by 2 and 6 percent respectively.
Senior management analyst Aaron Cosentino said the impact on property tax bills will be presented at a future meeting.
A new 4-cents-per-gallon local motor fuel tax would generate about $1.6 million annually. Elgin is one of the largest suburbs without a local motor fuel tax, Kozal said.
The city would increase its hotel/motel tax to 6 from 4 percent, adding about $1.39 to the average room rental.
The sales tax would increase by a quarter of a percentage point to 1.5 percent; by comparison, the sales tax is 2 percent in Carpentersville and East Dundee.
The budget proposes increasing ambulance revenues by no longer waiving deductibles for nonresidents. Residents would see no difference, Kozal said.
There also would be a water rate increase of about $3 per month to offset the consequences of losing Bartlett as a water customer in 2019, Kozal said. Bartlett buys Fox River water from Elgin but will switch to Lake Michigan water under a new contract.
The proposed budget cuts funding for the Elgin Area Convention and Visitors Bureau, which this year amounted to $212,500. The bureau, which has three full-time employees, gets about half its funding from the city and half in matching funds from the state.
The fire department would reduce its overtime costs by $700,000 by going to 32 from 34 firefighters per shift. The city is not planning to lay off any employees, Kozal said.
The city also would save on insurance costs with a new, high-deductible health care plan required for some staff members hired after January. Another $150,000 in savings would come from "enhanced oversight" of software vendor contracts, Kozal said.
The total proposed 2018 budget accounts for $258 million in expenses, a 13 percent decrease from the 2017 budget. But that's mostly due to a change in the accounting of cash carry-over, which now matches the accounting of the general fund, the document states.
The city council will discuss the proposed budget Nov. 15, Dec. 6 and Dec. 9. "We have more than enough time to work through any of the issues that are of concern to you, or to hear from the public," Kozal said.
As for this year's spending, the city will use only $622,000 from reserves, instead of an anticipated $3.5 million, mostly due to lower-than-anticipated health insurance premiums and savings from open positions, Kozal said.