Proposed Elgin budget includes lower property tax hike
Elgin residents would pay a median $51 city property tax increase next year with no changes in current services under the proposed 2017 budget.
The increase - amounting to about $1 per week - would mostly fund an additional $2.1 million in mandated police and fire pension contributions, which would total $14.4 million next year.
The higher contributions stem mainly from changes in actuarial calculations of mortality rates and, to a lesser extent, lower-than-anticipated investment returns in 2015, City Manager Rick Kozal told the city council Wednesday night. The budget is expected to be approved by the city council in late December.
Next year's spending would be virtually unchanged with a flat general fund levy, which is "not a small feat" for a city this size, Kozal said.
The proposed property tax increase is based on a home with a median value of $171,000 in Elgin's Kane County portion, or the majority of the city, whose homeowner would pay an estimated $1,266 in city property taxes next year, city officials said. The figure for the Cook County portion will be presented at a later date.
The proposed increase is lower than this year's, when Elgin residents in Kane County got hit by an average $120 hike.
The city's total proposed budget for 2017 is $297.6 million, including a $118 million general fund budget that pays for day-to-day expenses. The plan is to use $3.5 million in reserves to balance the general fund, Chief Financial Officer Deb Nawrocki said.
The general fund would have $37.9 million in reserves by the end of 2017, or about 32 percent of operational expenses, she said. The city council last year directed staff to gradually spend down reserves with a policy of always staying above 30 percent.
The overall budget is increasing by about 3 percent due to postponing to next year some street projects funded by gambling revenues, which were held up by the state for months and finally released in December 2015, city officials said.
Kozal said he wants to add three positions next year to the city's 900 or so employee roster: a police department employee in charge of managing video recorded by police body cameras, expected to be fully in use next year; a building maintenance staff member; and a seasonal worker to deal with 311-related needs.
The total proposed 2017 property tax levy, at $49.7 million, could have been even higher, but the city plans to use $1.2 million from its debt service and Illinois Municipal Retirement System funds to minimize impact on taxpayers, Nawrocki said.
"We are looking for every penny to save, and hopefully the public realizes that," Councilman Toby Shaw said.
The city has to contend with lower-than-anticipated revenues from its share of sales and income taxes, the latter an issue that is affecting municipalities across the state, Mayor David Kaptain said. The Illinois Municipal League has contacted the Illinois Department of Revenue to investigate the issue, he added.
Also, collective bargaining contracts include 2.5 percent cost-of-living increases that have been outpacing the growth of the economy, Kozal said.