Naperville looks to tighten its belt

Do more with less was the prevailing message at Tuesday's Naperville City Council budget workshop.

Faced with a recommended 10-cent hike to the city's property tax rate, councilmen eyed nixing new personnel requests and lowering nonunion pay raises as a way to try and maintain the current rate.

The council settled on a preliminary bump of 2 cents that would bring the city's portion of the property tax rate to 71.66 cents per $100 of equalized assessed value, but expect to be able to abate that increase during next year's budget hearings.

The city has to report a rate to the county by the end of the calendar year, but can always reduce the rate before the start of the fiscal year. The city's fiscal year begins May 1.

Currently, the owner of a $400,000 house in Naperville would pay about $894 for the city's share of his or her property tax bill. According to city officials, the average property value increased by 8 percent this year.

If the increase goes through as currently proposed the owner of that same home would pay about $996 next year.

Finance Director Doug Krieger said the city saw actual decreases to the city's share of the telecommunications and real estate transfer taxes this past year, which amounts to roughly $2 million in unanticipated revenue losses.

"We're not seeing anything that would indicate that downward trend is reversing," he said.

Competition in the telecommunications industry, coupled with the growing popularity of Voice over Internet Protocol phone service -- which isn't taxed -- caused some of the revenue losses, Krieger said.

Krieger floated the possibility of increasing the telecommunications tax rate by 1 percent, which would cover the $1 million loss. However, councilmen did not find the option appealing.

A slowing of the housing market accounts for the transfer tax losses.

The council keyed in on denying upward of 30 new personnel requests that could shave millions of dollars off the bottom line and reducing the limits of high-performance salary hikes would also save revenue.

"Our resident survey comes back with stellar marks," Councilman James Boyajian said. "So somehow you've got to convince me that we need these new people."

The council will officially vote on the preliminary property tax rate at an upcoming council meeting.