How Wheaton mayor candidates differ on budget plans, taxes
Wheaton's next mayor will face challenges finding ways to pay for millions of dollars in infrastructure projects in a city grappling with flood-prone areas and a backlog of road repairs.
Mayoral candidates John Prendiville and Phil Suess have expressed varying levels of concern about financial pressures from capital improvement plans.
Suess takes a hard line on property tax increases, while Prendiville sees a "structural budget problem" in the not-so-distant future and supports a continued practice of limiting tax increases to those resulting from economic growth.
Both longtime members of the city council, Suess and Prendiville are vying to succeed Michael Gresk as Wheaton's first new mayor in 12 years.
The hopefuls have outlined their positions on city finances in a meeting with the Daily Herald Editorial Board and a League of Women Voters forum.
"We've got about $13.3 million in projects over the next five years that have no funding source," said Prendiville, now in his third council term. "And on top of that, we have other projects which are not yet planned, but they're being discussed."
Prendiville said the city has roughly $59.5 million in projects with identified funding, but the unfunded projects include $4.4 million in sanitary sewer lining and upsizing; $4.9 million for a rehabilitation of Springbrook, a main-made creek with silting issues in the Streams subdivision; and $365,000 for ditch maintenance.
The difference between the city's operating expenses and reserves traditionally has been put toward capital improvements in addition to motor fuel tax revenues and other sources. But Prendiville cautions that financial planners are projecting the general fund will have operating revenues of $43.3 million and expenses of $42.9 million in 2021, leaving $400,000 for capital projects. Planners also forecast a deficit in 2022.
"While we have some excess reserves which can be drawn down, this is a limited source of funding, and plans are already in place to use excess reserves," Prendiville said in a follow-up email.
He said officials should consider issuing new debt once the city pays off a loan related to the library expansion in 2023. The city pays $2.3 million in annual principal and interest payments on those bonds.
Prendiville said he would rather not borrow money, but the city may need to take that step to pay for road reconstruction -- there's a $40 million backlog, he notes -- and stormwater and sanitary sewer projects.
Last December, Prendiville also voted in favor of increasing the 2018 property tax levy by $151,175, or 0.7 percent, to capture new growth. The city, he said, has maintained fairly flat property tax increases for the average homeowner.
"Our current city manager, our past city manager, they have had a really good grasp on the situation ... and their advice is that we should be doing as we have been doing, as the majority of the council has voted: capture this money while we can, build up our reserves," said Prendiville, a managing director and senior managing counsel for a firm that acts as a trustee for municipal bond issues. "We've got to identify funding for a large number of projects already on the books and then these other major projects we've talked about."
Suess, however, opposed increasing the property tax levy.
"The growth is captured by a lower tax rate and lower taxes to the people in the community if we don't increase the levy," Suess said at the time. "We've kind of rationalized this ... 'Well, we can do this because on the average household the taxes won't go up, and we're just taxing the growth.' If you increase the levy, the taxes go up."
At the League forum, Suess said in each of the last four years he's voted against raising property taxes "at a time when the city has consistently underspent its budget, has generated higher than expected surpluses and has maintained reserves in excess of stated targets."
In the 2019 budget, planners anticipate general fund reserves of $18.9 million, or 45.8 percent of expenditures, at the end of the year. That's above the targeted reserve amount -- 40 percent of costs -- of $16.5 million projected for the end of December.
In his fourth council term, Suess, a partner in an investment consulting firm, said the city's five-year capital improvement plan lays out proposed projects and their timing, but lacks a funding strategy.
"Over the years, we've always been able to fund each project that's been brought to us by the city. There's not one project that we've said 'no' to ... over the years, we've had different resources to fund that."
Suess cited as examples state grants and a $10 million bond issue for a streetscape overhaul downtown.
"A key point that I bring to the table is we need to live with the resources that we have," he said.