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Wayne's Words: Plenty to discuss as city heads into budget talks

Wayne Horne | 9/23/2015, 8:32 p.m.
Among the problems the Joliet City Council is going to have to deal with is an overtime bill in the ...
The Joliet City Council will have much to discuss when budget discussions start this fall and they strive to put together a spending plan that stays within the limits of city revenue.

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Wayne Horne

The Joliet City Council should begin conducting open budget meetings in a few weeks.

The 2016 budget will be the first one structured under Mayor Bob O’Dekirk. The council normally approves the spending plan at the last scheduled meeting of the year.

The annual budget process typically starts with the premise that everybody must work within the parameters of no new taxes and no increase of old ones. Property tax hikes are usually off limits.

At the state level, Gov. Bruce Rauner has pledged a freeze on property taxes, although it is primarily the province of local government entities, such as municipalities, to levy property taxes. The municipal share of state income tax revenue, however, may be reduced to prop up the state’s need for revenue.

What does that mean for municipalities? For instance, the mayor of Chicago told the city council that either they raise property taxes or he would be forced to cut police and firefighter personnel. Years of failing to properly fund the budget is the culprit, he says.

The city of Joliet has experienced several years of declining revenues and increasing expenses. That’s an unsustainable budget model.

Currently, Joliet’s council is contemplating an increase in water and sewer rates. The question is how much they will be raised, not if they will be raised. The city administration spends more than it takes in other areas besides the sewer and water fund. The 2015 budget was balanced by using reserve funds. The day of reckoning is coming.

It is sometimes forgotten that our own police and firefighter pension funds were underfunded in the past. The pension funds are on a schedule to catch up but they’re not there yet. The city also has an unfunded retiree health insurance fund of more than $200 million. That is not projected to be funded anytime soon. There are other more immediate concerns.

The police department will possibly exceed their overtime budget by well over $500,000 before the end of this fiscal year. They are currently at 82 percent of what's been budgeted and there are still four months left in the year.

The fire department is already at 101 percent of the overtime budget. It's projected that it could be more than $1 million over budget by December.

Several years ago the city received a grant that brought the fire department up to full strength, the only department in the city that is. The promise of the grant was overtime would be reduced because of the new hires. The opposite has occurred. The last year the fire department was within its overtime budget at this point in the fiscal year was in 2011.

Since then overtime has increased every year. In 2012, budgeted overtime was exceeded by $1.2 million and was at 101 percent by Sept. 14. This year overtime is at $1.7 million and was at 101 percent of budget by Aug. 28.

The recent purchase of Evergreen Terrace (ownership without revenue so far) will have a big impact on future expenses. Infrastructure maintenance on city streets has been done at a minimum in the last few years. There is no plan to date to increase that pace.

On the revenue side, gaming money continues to slide. On a year-to-date basis, Joliet’s video gaming share is up more than $100,000 from last year but the casino share of revenue is down $323,089 for a net loss so far this year of more than $222,000.

There are many other revenue and expense challenges the city council faces before passing a balanced 2016 budget. Many of these challenges -- with possible solutions -- were addressed in the 2015 Mayoral Transition Report commissioned by O’Dekirk earlier this year. One of them was the implementation of a five-year budget plan. A proper plan can limit future hand wringing.

Stay tuned…

Contact Wayne Horne at whorne@TheTimesWeekly.com.