Elgin budget improves, but cuts still needed

Elgin's financial picture came into slightly better focus Wednesday afternoon, as city leaders learned their shortfall this year is only $1.7 million to $2.2 million and it will be covered through city reserves.

Last July, at a similar workshop, the estimated shortfall was nearly $4 million.

City Manager Sean Stegall said he wasn't happy to dip into reserve funds, but acknowledged this was a crisis situation and that's why the reserve was created.

Since last year, the city has laid off 23 people; another 27 positions have not been filled.

But because the city will use reserves to plug this year's deficit, Stegall said, there will not be any more layoffs from now through Dec. 31, which is the end of the city's budget year.

Next year, however, could be a different story.

Stegall said the city still must reduce its expenses for 2010 by between $5.5 million and $6 million.

Stegall pledged to submit to city council members on Nov. 4 a balanced budget. He said it would include "personnel adjustments" but would not confirm or deny whether there would be more layoffs.

Mayor Ed Schock was more direct on the 2010 budget, which likely will be approved in mid-December after a series of workshops.

"We're probably going to have more layoffs next year. You saw the numbers. Where are we going to get the money?" he said.

Staff reductions saved about $5 million and cost cutting from everything from reducing summer pool hours, axing July 4 fireworks and deferring purchases helped save another $4 million.

The city also has doubled its towing fee for criminal traffic offenses, such as DUI, a move that is expected to bring in another $1.5 million next year.

Although the city's deficit for this year is smaller now, Schock said it's nothing to celebrate. He said costs - such as employee insurance and union contracts - will continue to rise.

"The problem is we've got projections of no revenue growth of all taxes and basically a decline in property taxes," Schock said. "If we're losing less, that's a good year. Keep in mind, we've already made adjustments that have helped us narrow that gap. The key, to me, is watching unemployment. If people aren't working, they're not spending."