Pending 2021 Elgin budget avoids property tax increase -- for now

  • Elgin City Hall

    Elgin City Hall Brian Hill | Staff Photographer

Updated 11/6/2020 6:05 PM
Editor's note: This story has been changed to correct Rick Kozal's first name and add pool to Lords Park.

Slashing expenses and taking pay cuts will help Elgin close the financial books on 2020 without a deficit, but 2021 will require continued austerity and spending nearly $3 million in savings to keep the city from running a deficit, officials said.

No property tax increases are on the table under the 2021 budget preview City Manager Rick Kozal presented to the city council this week.


The council will spend most of the next month reviewing the details before taking a vote on the budget Dec. 16. The budget represents a continuation of many of the measures officials put in place in response to the COVID-19 pandemic.

Those measures included easing business regulations to allow owners to remodel their operations to follow Gov. J.B. Pritzker's pandemic restrictions.

It also involved suspending $5 million in construction projects. The parks and recreation department cut $1.4 million in costs, including mothballing the East Side Recreation Center and Lords Park Pool. City department heads took a 10% pay cut, while other managers slashed their pay by 5%. Fire and police department employees were exempt from the cuts.

"Elgin will not be carrying any red ink into the beginning of the 2021 budget year," Kozal said.

That said, with declining revenues, the city was staring at an $11 million deficit for the 2021 fiscal year. Kozal said the plan he and his staff formed to address the shortfall started with a recognition that city residents have the same financial hardships right now.

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"The city must share the economic sacrifices with its residents and businesses," he said.

That means the three-year financial plan will keep salary and benefit reductions in place to save $4.6 million, including $1.5 million in 2021.

The city is also tentatively counting on receiving $5 million from Kane County as its portion of federal COVID-19 relief money created with the passage of the CARES Act. Health insurance and workers' compensation costs will be trimmed by $1.8 million.

But even with all the cuts, Kozal said the city's plan has $2.7 million in expenses without new income to cover those costs. It will dip into savings to balance the remainder of the budget.

Indeed, the longer plan envisions using $18 million of savings over the next three years to stay out of the red.

While 2021 features no property tax increase, Kozal said a tax hike may be unavoidable come 2022. That's when state-mandated contributions to the police and fire pension fund will hit a level the city can't afford to pay without finding new money or cutting city services.


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