Local News
City tries to close $2.3 million deficit
EFFINGHAM — City officials believe they will soon close a $2.3 million deficit in Effingham’s budget for this fiscal year.
“It’s look like we do have a balanced budget. We’re striving this year to make sure that anything we do does not have a substantial affect on the taxpayers,” said City Clerk Rick Goeckner.
He outlined a series of cuts and delayed purchases or projects city department heads suggested prior to Tuesday’s Effingham City Council meeting to help cut down the deficit.
The proposed cuts and delayed projects are part of a larger plan to balance the city’s budget. Goeckner said during a council meeting last month the city is looking at borrowing $700,000 from the Working Cash Fund and borrowing 0.5 percent of the city’s equalized assessed valuation, which is about $1.3 million.
The city plans to pay interest-only on the loans for the next four years until the sales tax portion of the tax increment financing district expires in 2013. Once the TIF sales tax expires, the revenue from sales tax in the TIF district that now goes to a special fund that can only be used in the TIF district will go into the General Fund and can be used for a variety of purposes.
Goeckner estimated the city will receive an additional $3 million a year when the TIF sales tax expires, which will be enough to repay the city’s loans in two or three years.
The list of cuts and delayed purchases or projects contains more than 30 items. Goeckner does not know the exact amount, but estimates the items on the list will save the city approximately $550,000 this year.
“However, just over $400,000 are delayed projects to next year,” said Goeckner, indicating those projects would occur next year because most of the projects, such as oiling roads, cannot be put off for longer than that time period because of deterioration.
“We will delay street maintenance and resurfacing for one year and the purchasing of new vehicles, which adds up to about $370,000. That is the biggest portion of the $400,000 plus savings (from delayed projects),” Goeckner said.
Goeckner hopes the city will be able to save the $400,000 needed to carry out the delayed projects next year through an early retirement option being offered to city employees contributing to the Illinois Municipal Retirement Fund.
There are 20 people who qualify for early retirement, with 11 people showing strong interest. Goeckner will present the early retirement package to the council within the next month.
Other cost-savings options on the list include smaller items, like centralizing the purchase of supplies into one department, that will save the city from a few hundred dollars to a few thousand dollars a year.
Goeckner plans to present the budget at the next council meeting on Aug. 18.
Angie Faller can be reached at 217-347-7151 ext. 131 or angie.faller@effinghamdailynews.com.
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