Naperville anticipates maintaining services, navigating uncertainties in 2021 budget
When the COVID-19 pandemic hit in the spring, Naperville officials quickly realized they'd have to adjust the 2020 budget and reconsider financial priorities, City Manager Doug Krieger said.
The city is now looking ahead to 2021 with plans to address some shortfalls and maintain its investment in four key areas - services, people, programs and the local economy - all while navigating the uncertainties of the coronavirus crisis.
"Our residents, our businesses, they look to us for support and leadership in the pandemic," Krieger said. "Budgeting appropriately for the resources we're providing is critical in helping us move forward in this experience."
City officials are proposing a nearly $507.3 million budget for next year, roughly 8.8% higher than this year's amended budget. The increase is largely driven by wages, pensions, health care costs and capital expenses, some of which account for projects deferred from 2020, officials said.
Delayed initiatives expected to move forward in 2021 include an $85,000 community engagement and strategic visioning process; a state-mandated Next Generation 911 phone service, costing $324,000; and a roughly $3.2 million downtown streetscape plan.
The proposed budget also comprises initial funding for projects deemed a priority by city officials that will require additional investment in future years, Krieger said. Roughly $167,000 is earmarked for research and policy development to eventually outfit police officers with body cameras. Launching a new diversity, equity and inclusion program, which includes hiring a new manager, is expected to cost $115,000.
"We spent a lot of time looking ... to ensure the budget that was brought forth in 2021 is not going to be one that is going to create a problem for us in 2022 simply by kicking the can down the road," Krieger said.
Public safety expenses are expected to increase next year largely due to salary, benefit and pension costs, though the police department is also budgeting for personnel training and upgrades to a computer-aided dispatch system.
During a budget workshop last week, city council members stressed a desire to hire more traffic enforcement officers and to dedicate more resources than initially proposed toward mental health training. Staff members said they will research the council's suggestions and revisit them during future workshops.
With revenue sources strained due to the pandemic and mitigation strategies continuing to evolve, financial trends for 2021 remain unclear, Finance Director Rachel Mayer said. But the city's fiscal responsibility in previous years has "led to a solid financial base to start recovery," she said.
The city is taking a conservative approach in estimating next year's revenues, budgeting $33.4 million in state sales taxes, a 7% decline from the 2020 budget; a 10% drop in state income taxes to $13.6 million; and a 2% dip in utility taxes to $15.5 million.
A local use tax on out-of-state spending has been "one of the bright spots" in the last year, accounting for online purchases that have surged during the pandemic, Mayer said. Naperville is budgeting $5.82 million in that category, a 26% increase.
Additionally, officials are projecting $13 million in home-rule sales taxes, about $6.25 million of which will cover anticipated shortfalls in the general fund, Mayer said. The remainder will go toward capital projects and debt service, as has been done in the past.
The city council voted in August to lift spending restrictions on that revenue source through 2021 to support core services and provide flexibility during the pandemic, she said.
Additional workshops are scheduled for Nov. 9 and 23. The city council is expected to vote on the budget Dec. 1.