Elgin considers layoffs, tax increase to bridge budget gap
Faced with a potential $13 million budget deficit, Elgin City Council members Friday listened to suggestions of drastic cuts such as closing fire stations and laying off up to 110 city employees, as well as changes to the way property taxes are assessed to ensure steady tax revenue.
City Manager Sean Stegall recommended council members adopt a balanced approach that incorporates spending cuts and tax and fee increases for the 2012 budget. But he also presented two other options: One that closes a projected deficit using only expenditure reductions and another that uses only revenue increases.
To address the deficit by making cuts alone, Stegall suggested closing two fire stations, doubling the workload in each snow removal route, replacing eight code enforcement districts with two, essentially eliminating the Parks and Recreation Department, and laying off about 110 full-time-equivalent positions -- including 30 firefighters, 20 police officers and 19 public works employees.
To bring in more revenue, the city is considering changing the policy of holding a steady property tax rate at $1.92 per $100 of assessed value. Traditionally, that policy led to tax revenue rising as property values rose and new buildings came on the tax rolls. But in 2011, with property values falling, it caused a $2 million decrease in revenue.
"This is our 19th year," Stegall said, "and hopefully it will be our last -- $1.92 doesn't make sense."
Stegall recommends that the city levy for the same amount in property tax revenue as in 2011, meaning the property tax rate likely would rise to more than $2.
Stegall also suggested cutting $2 million from casino fund expenditures by discontinuing funding to all outside agencies. That would leave funding for the city-owned Elgin Public Museum and the Fourth of July parade.
Councilman Robert Gilliam expressed specific concern for the $100,000 loss to the Boys and Girls Club of Elgin. He questioned whether it would put the organization in danger of closing.
"I'm going to assume that this money helps and it's going to hurt not to have it," Stegall said.
His recommendations included setting a refuse fee at $18 per month and increasing the home rule sales tax by 0.5 percentage point to 1.25 percent, with the additional revenue set aside specifically for road and sewer improvements.
Council members discussed charging residents in the areas of the city where residents rake leaves to the street about $2 per month for leaf collection and discontinuing the city's practice of providing bags for residents who have to bag their own leaves.
Councilwoman Tish Powell said continuing the program at all is contrary to suggestions by the sustainability task force. She said raking leaves to the street clogs drains and floods intersections and the fee would be unfair to those who mulch or compost their own leaves.
"Continuing to use our limited resources to provide this service only perpetuates this problem," Powell said.
The council will discuss the budget at upcoming meetings, including one from 2-6 p.m. Wednesday, Nov. 16, at The Centre where council members will discuss the general and riverboat funds and one from 9 a.m. to noon Saturday, Nov. 19, at The Centre where the public is invited to ask questions and make comments. The proposed budget is at cityofelgin.org.