Naperville approves smaller raises

Naperville city employees can expect smaller raises in the coming fiscal year as fears mount the economy will worsen.

The city council approved a proposal to lower departmental raise pools from 2.25 percent to 1.5 percent at Monday's budget workshop. Some employees may still see significantly higher raises, it just means there won't be as much money for department heads to spread around. In the past, city employees have seen merit raises go as high as 7 percent, but the council has yet to set any raise limits for this year. Last year's raise pool was 3.85 percent of the department's salary budget.

By lowering the raise pools to 1.5 percent, the city will save about $630,000 in the coming year, said City Manager Doug Krieger. That's important because city finance officials are now anticipating $2 million less in revenue than originally anticipated in the proposed budget. The city is looking to make cuts in other areas as well to make up for the shortfall.

The raise pool reduction was precipitated by reports that the city's sales tax, real estate transfer tax and fine projections need to be more conservative.

"We've gotten more bad news instead of good news," Krieger said.

Councilman Doug Krause suggested forgoing raises this year with the promise to employees that there would be no more layoffs - the city has cut 43 jobs this year. But Krause's colleagues were worried the city wouldn't be able to live up to that agreement and pushed forward with the lower raise pool proposal instead.

"This is much more honest approach than promising something we may not be able to deliver," said Councilman James Boyajian.

The council also voted to maintain the current property tax rate at Monday's meeting. The tax rate will remain at 71.66 cents per $100 of equalized assessed value. But that doesn't mean homeowners won't be paying more in property taxes to the city next year since property values in the city increased by an average of nearly 6 percent, according to city officials.

That means a house valued at $300,000 this year will be taxed at $317,700 next year. So that homeowner paid about $680 this year in property taxes to the city and will pay about $723 in the coming fiscal year.

The tax rate was approved by a 5 to 3 vote. Councilmen Richard Furstenau, Bob Fieseler and Grant Wehrli voted against the tax rate, saying it should be lowered further so property owners aren't affected at all. That would have required another 4-cent drop, Fieseler said. Furstenau suggested cutting raises out of the budget in order to lower the property tax rate.