Des Plaines budget hearings begin
Des Plaines officials propose spending $3.3 million less in 2011 than what they spent this year and raising property taxes roughly 2 percent to run the city.
Tuesday night was the first of three days of hearings on the proposed $95.7 million 2011 calendar year budget.
The city council reviewed general fund expenditures including budgets for elected officials, the city manager's office and various departments that come under its purview such as finance and community and economic development.
Officials are projecting a $2.2 million deficit primarily due to expenditures in the city's water and sewer fund and within the city's five tax increment financing districts. The general fund also is projected to have a $248,000 deficit.
Despite such trends, the city's general fund balance is much healthier today than in 2007, Finance Director Dorothy Wisniewski said.
The city's cash on hand to deal with emergency expenditures has gone up from 2 percent in 2007 to an anticipated 14.6 percent by the end of the 2011.
Yet it still falls short of the 25 percent threshold recommended for a healthy fund balance roughly $14 million or six months of operating expenses.
Officials said the 1.95 percent proposed tax increase expected to generate $450,000 wouldn't be used for any general fund expenditures but rather would cover the city's obligations toward the rising costs of police and fire pensions, which by state statute must be fully funded by 2033.
"There are no other tax or fee increases proposed (in the budget)," acting City Manager Jason Slowinski said.
Slowinski cautioned officials that the city still carries a $95 million debt load, hampering its ability to issue more debt for long-term capital improvement projects or equipment purchases.
Officials said overall city revenues are down by $3.18 million in 2011 from this year including a $2 million shortfall in federal and state grants, an $861,000 drop in one-time permit revenue received this year from the casino project, and a $156,000 decline in income tax receipts.
"We need to identify other sources of revenue," Slowinski said.
Residents won't see a water and sewer rate increase in 2011, but officials plan to study the rates later this year. The double-digit rate increases residents experienced in recent years were city of Chicago increases that were passed on, Slowinski said. Des Plaines has not raised rates to fund its own water and sewer operational cost increases in several years, he added.
The city council will meet again tonight to review additional general fund expenditures, including police, fire, public works and engineering departments budgets. On Thursday, the council will review all non-general fund expenditures such as TIF districts. Budget discussions will continue Oct. 20 and 25.