Naperville considers increasing property tax rates

Naperville officials are considering a three-cent property tax-rate increase in order to provide extra cushion in its budget in case of a further economic downturn.

But they say that amount could be abated in the spring if the emergency reserve is not needed.

Councilmen and city staff held a third budget workshop Tuesday afternoon to discuss the $5.1 million budget shortfall that could grow to $11 million next fiscal year.

At least one councilman, James Boyajian, says he believes the shortfall figures are even higher due to the way contingencies and staff vacancies are calculated.

The deficit is largely due to lower than expected sales and real estate transfer taxes along with rising costs.

"We have no choice but to consolidate, streamline and eliminate some programs, create new internal and external partnerships, cut costs and find other sources of revenue," City Manager Pro Tem Robert Marshall said. "Our challenge is not only to make our government smaller but to rightsize while providing minimum impact on services to residents."

City staff presented its plan to the council Tuesday for filling both of its budget holes. It has identified areas to reduce expenditures in each department as well as outside agencies that it funds such as the libraries, Naper Settlement and Naperville Community Television. It will also save money by not replacing vehicles, continuing its hiring freeze and health insurance costs coming in under budget.

The city expects to save about $3 million next fiscal year by cutting roughly 40 jobs. About 22 of these positions are already vacant.

Officials say they would not cut critical services. Those that would be impacted include police records hours of operation, street light maintenance, street sweeping, parkway maintenance and cul-de-sac salting.

In addition to cuts, the staff recommends an additional three-cent property tax rate hike that would bring the rate to 74.66 cents per $100 of equalized assessed value.

Doug Krieger, director of finance, said the increase would provide a $2.1 million reserve in case the economy worsens and could be abated in the spring.

Councilman Grant Wehrli said he could not support an increase.

"There's a palpable feeling around here that things are just not good and I just cannot put this burden on them (taxpayers)," he said. "We need to make the cuts where we need to make it and keep the tax rate flat."

Boyajian said he doesn't want to burden taxpayers either but it would be prudent to have that cushion and it would likely be returned in the spring.

The city council will hold another workshop to discuss its tax levy at 3:30 p.m. Monday, Oct. 27, at the municipal center, 400 S. Eagle St.