Elgin getting set for a rainy day

Elgin officials say the slow housing market may have them tightening their belts a little next year.

City officials released their proposed 2008 budget on Tuesday. And while they are projecting a 9.8 percent increase in total revenue, officials said they plan to take a conservative approach on expenses because of the current economy.

"The theme is caution," Assistant City Manager Sean Stegall said. "There's a lot of concern that the housing slowdown would evolve into a full-fledged recession.

"It affects everything," Stegall said. "Many communities are contemplating laying people off. We want to avoid that situation."

The city council will review the budget at 5 p.m. today at city hall. A vote expected in late December.

Overall, city officials expect to take in about $95.2 million in the general fund, which pays for basic services such as police, fire and community development. That's up from $86.7 million this year.

"We're budgeting for no growth in sales tax for next year," Stegall said. "We've cut our income tax growth projections in half. Building permits have dropped 75 percent compared to their highs."

Still, projected revenues are up 9.8 percent.

But proposed expenses in the general fund are up only 6.8 percent, from $83.3 million last year to $88.9 million this year.

Much of the increase is tied to rising personnel costs, Stegall said.

"We hired additional people this year," he said. "Increased cost for health insurance. Increased overtime expenditures when we had the flare-up in gang activity this year."

Of course, the budget still includes money for major projects such as street resurfacing.

The city is also setting aside money to hire more police officers and firefighters over the next five years.

And the budget does include money for most of the city council's strategic initiatives -- such as $2.7 million to fund deconversions of multitenant housing, $3.5 million to improve the city's sports facilities, and $350,000 to upgrade the Judson University softball field in anticipation of the Chicago Bandits pro softball team's planned move to Elgin.

But there's still no money budgeted for one of the council's initiatives: the hiring of four more full-time public works employees.

"There would be a lot of concern over expanding services, or enhancing services, at a time revenues are shrinking," Stegall said.