Tag Archives: general fund budget surplus

So what happened Monday night at City Hall?

The Normal Town Council spent another evening discussing how to deal with a revenue shortfall.  Unchecked it would mean going from a surplus in the general fund to a deficit in two years.

The Town is not currently in a deficit situation.  In fact, the town will end the current 2009-10 budget year with a surplus in its main operating fund.   But due to reduced state income tax collections and state and local sales tax receipts, the anticipated eight percent cushion will  fall to 2.5 percent of total general fund expenditures.   Our finance department recommends an end of year balance of eight to ten percent of general fund expenditures.

2009 Election

In this year's council campaign, we were well into the deepest recession in my lifetime. My top priority had to be maintaining the fiscal integrity of the town. And I remain committed to that goal. We will get through this without experiencing the kind of budget crises have enveloped cities unwilling to make difficult decisions.

The council’s goal is to avoid a deficit and to shore up the general fund reserves through a combination of budget cuts and tax increases.

While it’s tempting to simply cut your way out of your predicament,  we discovered that you have cut far too deeply into the basic services that define Normal town government.   That was not an option.

 Two employees signed up for the early retirement incentive.   Understandably, many employees close to retirement considered taking the benefit, but concluded that they would rather work, a typical response in an uncertain economy.

Still, staff identified several areas that could be cut without impacting services too much.  

  • Shiny cars and trucks take a back seat to programs.  At this time, it didn’t make a lot of sense to me to have enough vehicle reserves on hand to replace every police car, garbage truck, or mower at once.     $1 million from this fund will be transferred to the general fund over the next two years.   As far as I’m concerned, excessive vehicle replacement reserves are a good place to start.
  • Program cuts that are significant but are manageable.   The Harmon Arts Grants are a great gesture, and we are able to help several arts programs in the community, but we can eliminate those dollars while funds are tight.  The same holds true for Normal Newsline, half of the town annual tree planting budget, City Vision, and the parks and recreation program brochures.     Eliminating electronic recycling will save $175, 000 over five years.   Turning over operations of the Activity Center to Normal Township will save $323,000 over five years.   We need to develop a cost sharing arrangement with Unit 5 on crossing guards.
  • The 1/4 cent sales tax adds a quarter to the purchase of $100.  While I don’t relish it, imposing the quarter cent sales tax is the most painless way to collect $1.3 million per year.    We have done our best to delay matching Bloomington’s rate.   I had hoped we could hold out.   We no longer have that luxury.
  • A temporary property tax hike.  The 4.3 cent per hundred dollar rate increase would allow the Town to cover more of the cost of state-mandated employee retirement benefits with the property tax.  It would boost the tax bill of the owner of a $200,000 home about $30 per year.   We resisted a proposal to boost the property tax another 6 cents for operations.   In my mind, when the economy recovers, this tax hike goes away before the Harmon Arts Grants or the parks and recreation brochures return.
  • Other revenues include increasing the parking fines for the first time in 20 years to $20, boosting summer camp fees, imposing towing fees for cars involved in alleged crimes, and new technical rescue and auto extrication fees (usually born by insurance companies).

We said no to moving up the second half of the planned garbage fee increase.   The water/garbage bill has provided too much sticker shock as it is this year.  There was no reason to provide another premature shock.

I said no to a “convenience fee” for paying your bills on-line.  That’s my definition of an “inconvenience fee.” 

If we follow this plan, we will build up the Town’s general fund reserves to near $3 million by March 31, 2011 and $3.8 million the following year.

After the work session, the council met in executive session  for about an hour to receive information about the potential for involuntary job cuts.  At this time, there does not appear to be any council appetite for layoffs.  

 Hopefully, that relieves some of anxiety that I sensed in the city council chambers Monday night.

This is an unhappy but necessary part of the job.   During my re-election campaign, I pledged that the financial integrity of Normal Town Government would be my top priority.   It will remain my top priority for the rest of my term.

Program cuts and tax and fee increases are necessary at this time to prevent a budget crisis.  The economy will turn around, and these actions will help the Town rebound quicker than other communities.  

Our employees are doing a super job working through this time of reduced revenues and providing the kinds of services that make us all proud to live here.



Filed under Budget, Taxes, Town Council, Uncategorized

New balanced budget represents responsible spending blueprint

Final action was taken Monday night on the Town of Normal’s Fiscal 2009-10 operating and capital budgets, and I will say that a lot of effort by elected officials and staff went into getting it right.

The council decided to eliminate the proposed solicitor permit fee that I wrote about last week, cutting an estimated $8,000 in potential revenue which was unlikely to make much of a difference in a $50 million dollar annual operating budget.

Without rehashing my previous post on this subject, I think it was wise decision.  It means not-for-profit organizations like Habitat for Humanity can keep all they raise in their annual door-to-door fundraising campaigns.  

In this entire months long budget exercise,  the council achieved its goal of passing a balanced budget in a tough economy.   Our actions a year ago to examine our spending on core services, followed by a conscious decision to cut a couple of positions, put Town government in position to weather the beginning of the economic downturn.

In recent years the council has held an annual retreat to strategize and set goals.   It has been a good exercise.  

Last fall, we determined that with flat sales tax growth coupled with the rising costs of materials like road salt and equipment like heavy trucks, it was best to do another round of belt tightening.   No new employees or major programs.

Sales and property tax increases were put on the table–briefly. 

Personally, I felt strongly that raising taxes in an economic downturn before exploring other options was not the right thing to do.   (Little did we know that the U.S. economy was contracting in the fourth quarter of 2008 by more than 6%.)  

In retrospect, I strongly support the council’s second consecutive hold-the-line budget without a general tax increase.   Our capital program might not be as ambitious as it has been in recent years, but a number of very important projects are on the list, including several street improvements, the Town’s one-time contribution of a parking lot to the baseball stadium project, and construction of long overdue replacement water slides at Fairview Park.  



We will end the fiscal year at the end of this month with a general fund balance of a little less than $5 million — that’s planned surplus not deficit. 

 With Normal finance director Ron Hill’s uncanny ability to accurately project balances by underestimating revenue and overestimating expenses, I am confident the fiscal 2009-10 budget year will end with another roughly $5 million general fund surplus.

I applaud Town staff for their fiscal responsibility.   No one will be traveling out of state next year for conferences.  Staff put new defensible fees on the table, like the $500 fee imposed on those arrested for drunk driving when they reclaim their vehicles.   Charging for repeat false fire and security alarms and handling less serious crimes by ordinance violation and fines payable at city hall make sense as well.

Our study of Town services resulted in several examples of valuable yet non-essential services which could be reviewed if this downturn continues into next year.   The council will also continue to study water rates to make sure they’re in line with the current and future operating and capital needs of the system.

With the economy still uncertain, state government operating out of a $9 billion hole, and many local governments stuggling to balance their books, it’s good to be in Normal.

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Filed under Community Investment Plan