Elgin plans for flat general tax levy, higher water/sewer rates

Elgin's proposed general fund budget for next year, along with its three-year financial plan, aims to find ways to rein in expenses and increase revenues without putting the burden solely on residents, city officials said.

The plan calls for no property tax levy increases to fund government operations through 2020, with levy increases only to pay for pensions and bond payments for what would be six consecutive years. The average property tax bill in Elgin would increase by $29 next year, Assistant City Manager Aaron Cosentino said Friday.

However, water and sewer rates are expected to grow more than anticipated, or by 42 percent through 2022. That's largely to offset the loss of about $4.7 million per year in revenues when Bartlett switches from buying Fox River water from Elgin to buying Lake Michigan water in mid-2019, city officials said.

The proposed budget calls for $1 million in cuts in 2018, mostly in firefighters' overtime, plus a new 4-cents-per gallon gasoline tax, a 0.25-percentage-point boost to the 1.25 percent local sales tax, and a 2-percentage-point increase to the hotel tax that brings it up to 6 percent. The city would use $6.7 million in reserves through 2020.

The goal is to maintain services for the community, Cosentino said. "Spreading the impact across a larger tax base through revenues like sales and gasoline taxes lowers the impact on any one household or group," he said.

The city council, which meets Wednesday, has yet to discuss the plan in detail.

Property taxes

Public safety pension contributions have increased 237.5 percent since 2007, while property taxes for city operations have grown by 5.5 percent, City Manager Rick Kozal told the council at a recent budget meeting.

The general fund property tax levy is projected to be flat at $27.8 million through 2020. The levy for police and fire pensions would increase by 2 percent and 6 percent, respectively, in 2018; the amount is set each year after an actuarial analysis that includes pension funds performance.

Water and sewer

Water and sewer rates were flat for five years through 2016, when the estimated typical bill was $47. A rate increase this year resulted in a typical bill of $49.50, CFO Deb Nawrocki said.

City officials plan more gradual increases through 2022, when the typical bill would be $70.29 per month, she said. The regional average across seven counties is $62.75, she said.

Besides offsetting the loss of revenues from Bartlett, the money will fund needed projects and the addition of two full-time staff members and three interns to the utility department, Nawrocki said. "Aging facilities and regulatory requirements have increased required capital expenditures," she said.

The current financial plan calls for $2.5 million in operating capital expenses through 2021; the proposed plan increases that to $6.9 million, and the city would borrow $5.7 million in utility bonds in 2018.

The city also sells water to Sleepy Hollow; nonresidents pay a rate 25 percent higher than Elgin residents.

Other fees, taxes

There are no projected increases in electricity, natural gas and telecommunications taxes through 2020. Refuse/recycling fees will increase by 3 percent each year through 2020, as per the city's contract with Waste Management, Cosentino said.