Elgin mum on budget projections, gets positive report on pension funding
The city of Elgin acted quickly in the spring with measures like cutting personnel costs and lowering borrowing to deal with the economic fallout of the COVID-19 pandemic, but city officials still aren't saying what their revised budget projections are.
There are still "a lot of unknowns" regarding the financial effects of the pandemic, Elgin Chief Financial Officer Debra Nawrocki told the Elgin City Council last week. "Overall we're going to have some shortfalls, but so far it doesn't look like it's really horrible," she said.
Nawrocki declined to answer questions about specifics from the Daily Herald.
Others suburbs have publicly discussed their projections in light of the pandemic.
Hoffman Estates officials said last week they estimate a revenue shortfall of $5.3 million. Itasca officials said earlier this month they expect to draw $2.2 million from reserves to cover a 14% revenue drop. Naperville projects a $12 million shortfall in its general fund, down from $18 million initially projected, according to a report last week from the city's finance director.
Nawrocki told the city council last week that a few of the city's larger revenue streams "are holding up pretty good," including property taxes, which, with a flat levy, amounted to $18.8 million through June compared to $18.9 million in the same period last year.
Sales tax proceeds - which municipalities typically receive three months later - were about $350,000 behind through April, but the use tax went up by $200,000, which Nawrocki attributed to the addition of internet sales tax revenues starting in January.
Income tax revenues are about $900,000 behind last year's, but that's largely because the tax filing deadline was moved from April 15 to July 15, Nawrocki said. Typically, the city gets a large tax revenue influx in May, so hopefully the same will happen in August, she said.
Proceeds from hotel/motel taxes and local motor fuel/gas taxes are down, including "a small number of delinquencies in both categories." Nawrocki declined to say how much.
Elgin had projected a $267 million budget for 2020, including a $121.4 million general fund.
The city council last week also heard a presentation about the city's comprehensive annual financial report from Jim Savio, of the firm Sikich, who said the city had about $58.2 million in reserves, not including casino proceeds, at the end of 2019.
Elgin's public pension and retiree health funds had "a very good year" in 2019, mostly due to higher-than-anticipated investment income amounting to nearly $39 million, Savio said.
The police pension fund had a net value of $138.5 million and the fire pension had a net value of $100.9 million as of Dec. 31, according to the report.
State law requires 90% funding by 2040, but Elgin is going above that with a 100% funding goal by 2040.
The police pension fund was at about 55% funding compared to 48% in 2018. The fire pension fund was at nearly 53% compared to 46% in 2018, Savio said. That's about average for municipalities of Elgin's size, he said.
Savio praised the city for being one of few local governments with a retiree health insurance fund, which last year went from 35.5% to 50.3% funding and had a net value of $14.4 million. The city established the fund in 2007. "I think you should be proud of that," he said.
• Daily Herald staff writers Marie Wilson, Eric Peterson and Trey Arline contributed to this report.