Des Plaines mayoral hopefuls differ on city finances
Des Plaines' past financial decisions and future solvency have been a hot topic in the mayoral race pitting two current aldermen against a former mayor.
Ward 3 Alderman Matt Bogusz, Ward 6 Alderman Mark Walsten and former Mayor Tony Arredia are vying for the seat on April 9.
Bogusz lays the blame for Des Plaines' poor financial state when he took office in 2009 squarely on Arredia's shoulders.
“While he was mayor, the property tax levy was increased 10 out of 10 years,” said Bogusz, 26, the city's finance committee chairman.
Bogusz said over the last four years, the city has paid down $24 million of the $82 million in bonded debt it had in 2009 while increasing its reserves from roughly $1.7 million to more than $18 million anticipated at the end of 2013, and avoided raising the property tax levy in the last three years. The city also has cut spending and reduced its workforce about 12 percent through layoffs and attrition.
“It is a dramatic change from the past,” Bogusz said. “I chalk that up to leadership.
“At the height in 2005, the city of Des Plaines had $102 million in bond debt, which is a crushing amount of debt for a municipal government our size (serving) around 60,000 people,” Bogusz said. “In the same year that we had $102 million in bond debt, we also had 5.1 percent property tax levy increase. For a $100 million organization that employs a little under 400 people to have $1.7 million in the bank ... it's reckless. That was the position that we were left in 2009.”
Bogusz said the city was forced to take out short-term loans to make payroll and pay bills for basic needs such as electricity and sandbags during flooding.
Arredia, who was appointed mayor Jan. 5, 2000, replacing Mayor Paul W. Jung, who died in office in October 1999, said during his tenure the city was borrowing heavily to invest in redevelopment through the creation of special taxing districts.
“We went into debt because we were building Metropolitan Square, we had TIFs (tax increment financing districts) that we were putting together,” said Arredia, 75, who retired as mayor in April 2009 due to voter-imposed limits on consecutive terms. “To do that, you've got to go in debt.”
Arredia pointed to neighboring Rosemont whose debt stands at more than a half-billion dollars including interest costs for a tiny village of 4,202 people.
“That's not really debt,” Arredia said. “They are bringing in businesses that in years will bring in the money they need to survive. That's what we did.”
Arredia said the city council agreed to lower the city's reserve fund balance to 12 percent of operating expenses and his administration also reduced staff.
“This money that's coming in is a result of all the developments,” Arredia said. “One of the reasons why they (current aldermen) were able to knock down some of the debt is because of all the money that was starting to come in because when you build these developments, you don't get all your money in one year.”
Arredia said if it weren't for his administration, Des Plaines would never have won the state's 10th casino license. Rivers Casino generated roughly $4 million for the city in its first six months of operation, he added.
Walsten, 55, who runs a home inspection business and is in the middle of his second term, said the city has been able to keep from raising property taxes in the last three years because it laid off workers, cut spending, and there hasn't been much investment in the community.
“We really haven't taken on any new projects that would increase debt for obvious reasons,” Walsten said. “There really hasn't been much accomplished in the last four years. There's a lot of opportunities for growth in downtown Des Plaines.”
Walsten acknowledged it may be hard to keep property taxes down perpetually when more than 60 percent of the city's budget is made up of salaries and pensions, and health insurance costs, all of which keep rising.
The city council may have to consider more modest employee raises during future union negotiations.
“It's my viewpoint, if (you), the general public, are making an extra 1 to 2 percent more than you did last year, that's what the public sector should be getting too,” Walsten said. “They shouldn't be getting 3 to 4 percent.”
Walsten said one way to keep from having to raise property taxes without cutting services is to generate more sales tax.