The Highland City Council approved a $48.3 million budget on Monday that will be in the black.
The budget reflects an overall operating and maintenance expenditure decrease of 1 percent, with no change to operating revenues and a $1.28 million transfer to the city’s reserves.
The City Manager Mark Latham said that this budget reflects the city’s desire to invest in aging infrastructure while maintaining facilities and building reserves. Many of the major expenditures of the budget are for infrastructural improvements.
“We are talking about development,” Latham said.
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According to Latham, the city has been able to function with the struggling financial status of the state of Illinois because of a conservative budgeting strategy. It is expected that income tax revenues will remain consistent at $1.1 million and sales tax will continue to grow.
Next year’s budget has city expenses decreasing by 6 percent, which means the city is expected to have excess revenues of $217, 379.
Overall, the budget shows $4.27 million dollars to be collected from property taxes.
“If looking at our property tax revenue, you can see that it has been pretty flat. Hopefully, with the current market those values will increase. Anytime you add, it should add to those revenues of the utility departments,” Latham said.
About $2.5 million is expected to be collected from sales taxes. Those expectations would each be 2 percent increases over the current fiscal year.
“We feel the retail base is strong,” Latham said.
$4.27 millionAmount of property taxes to be collected next year
$2.5 millionAmount of sales taxes expected next year
$1.4 millionAmount of non-home-rule-sales tax expected next year
In recent years, the city has changed the classification of debt from general obligation bonds, which are backed by property taxes, to alternative revenue bonds, which are paid for by other types of taxes or user fees, such as water or electric rates. Because of the issuance of these revenue bonds, the city’s legal general obligation borrowing capacity is 100 percent available. As a result of the issuance of revenue bonds, as opposed to general obligation debt, the city’s legal debt margin is 100 percent available.
Parks and Recreation
Major initiatives of the Parks and Recreation Department remain consistent with an overarching budget theme of maintaining current facilities.
The Korte Rec Center is now 15 years old. Latham said any facility near that age will need repairs. Big budget expenditures include $100,000 paint job to the KRC outer walls. Parks & Rec Director Mark Rosen said that the rec center would also need tuck-pointing in addition to painting. The rec center also budgeted $58,000 for the replacement of the pool heater.
The city is working toward creating a plan to ensure the KRC will have the reserves needed to replace old equipment and is expecting to set back $80,000 for unseen variables.
Other major initiatives for other future budgets include saving for a new outdoor pool, making park facilities compliant with the Americans with Disabilities Act, making repairs to the Old City Lake dam on the original spillway, installing comfort stations at Rinderer Park, Silver Lake Park and the Highland High School tennis courts, completing the Sharpshooters Trail and seeking out grants to connect a shard-use path from Troxler to the roundabout at U.S. Highway 40.
Improvements to sewer collection and the water reclamation facility are major expenditures on this year’s budget.
At the water treatment plant, the department will continue to replace and update valves, pumps and other equipment. A total of $285,279 was budgeted toward improving the plant.
The city also planned to gradually replace the water distribution system over the next 20 years, an amount allotted in this year’s budget at a sum of $515,000.
The city is also planning to improve the water reclamation facility and sewer collection system. About $1 million has been budgeted for the project for the coming year. The plan includes a $135,000 sewer trunk-main rehabilitation and a $155,000 water and sewer extension. However, $665,000 of that cost is reimbursable from the Illinois Environmental Protection Agency, after the construction contract is awarded.
The budget also shows the streets of Highland are expected to receive almost half a million dollars worth of improvements. These improvements include a $175,000 road resurfacing in front of Rural King on Sportsman Road. Another $155,000 will go to engineering costs for a roundabout that will be located at the Iberg road, Broadway and Veterans Honor Parkway intersection, which is reimbursable through federal safety funds.
$1.1 millionAmount of state income tax expected
$2.8 millionAmount of expected water revenue budgeted
$2.97 millionAmount of expected sewer revenue budgeted
The city is expecting to collect $1.4 million of non-home-rule sales tax. Out of the NHR tax revenues, $250,000 will be used for road rehabilitation and reconstruction. Total capital expenditures for the next year funded by the non-home-rule sales tax are expected to be $205,000.
Three public works trucks will also be replaced. For the truck replacements, $100,000 was budgeted between sewer collection, water distribution and the street departments and the water treatment plant.
Building and zoning
The building and zoning budget shows $60,000 budgeted for capital improvement costs. According to the assistant City Manager Lisa Peck, the funds will be used to demolish nuisance properties, either abandoned by the bank or the owner. The demolition costs $15,000 to $20,000 per property. Peck said most of the buildings the city is looking at are located in the older parts of town.
The electric fund is expected to make revenues of an estimated $14.47 million,which is about a 3 percent increase.
$14.47 millionAmount of electric revenue budgeted
$2.18 millionAmount of fiber optic revenue budgeted, 10 percent decrease
Latham said that in the electric department is looking at about $1 million in capital investments, with improvements to transformers, poles, and investments in smart meters.
Major production goals of the electric department for this coming year include, replacing aging batteries for the CAT generators and the controls in the Nordberg building, 138 control house and the west-side substation control house and constructing a climate controlled housing for control batteries in the west-side substation.
Electric distribution goals include adding 1,000 additional smart meters to the Smart Grid, improving the distribution system by converting the 2,400-volt circuits to 13.2 KV circuits and decommissioning the 2,400-volt substation on Poplar Street, finding “bad” poles through poles inspections, then replacing the necessary poles and purchasing 100 additional LED streetlights.
The projected revenue for the fiber optic fund is estimated to be $2.18 million, which is about a 10 percent decrease from the following year. The fund is also budgeted to be deficient for the next five years.
“Fiber will take this year to evaluate opportunities in the market and with where technology is headed,” Latham said during a budget meeting.
According to Angela Imming, the director of Highland Communication Services (HCS), the city’s fiber-related company, $1.6 million of the current fiber deficit is bond payments.
“Whether we like the bond payments or not, they are there,” Imming said. “If HCS does not pay that, another department needs to… We are doing the best we can to get that revenue up.”
To raise the revenue of HCS, Imming said the current goal is to increase its customer base by 5 percent. Imming reported that HCS had a total of 1,968 customers on March 17, but the department is seeing a lot of cycling of customers switching to competitors who promote better rates.
According to Imming, this year the fiber fund has $192,000 budgeted for equipment replacement.
Major initiatives for the fiber department include providing support to construction build-out efforts, implementing online bill payment for customers, deploying a subscriber based wireless solution within city limits and preparing to deploy it within electrical grid outside city and entering at least one contract for collocation or off-site storage service at HCS data center.
Public Safety Department
While it is not in the budget plan, staff recommended that the city council start looking for funds, not only public safety facilities, but equipment as well.
“We are struggling to keep up with the necessary upgrades on current facilities, without even looking at a new facility,” said Public Safety Director and Police Chief Terry Bell. “We need to find the funds somewhere for new facilities and equipment.”
Bell said that the Public Safety Department has considered collaborating with other area departments to find funds. He also said that grant funds have not been available for application, and even if they were available the department would need to have matching funds.
According to Latham, the city sent a provision to the state for an expansion of sales tax revenue by 1.5 percent for public safety. He said that another option could include taking out a construction bond for a public safety facility once the KRC bond is paid for in 2021. He also recommended using sales tax revenue as an option for future public safety improvement.
As for now, the only capital items budgeted are within the Highland Police Department. For $60,000, the HPD will replace one patrol vehicle and the purchase of an addition administration vehicle which could be used to pull the new department boat and boom trailer.
The Highland ambulance and emergency medical staff does not have any items budgeted for next year. EMS Chief Brian Wilson said EMS is fully staffed and is down 250 calls from last year. The EMS staff made the decision to pull back on non-emergency calls from St. Joseph’s Hospital, Anderson and Breese hospitals and also no longer make transfers to Springfield. The decision was made so the department to serve Highland citizen emergencies as their top priority. However, as a result, EMS revenues are expected to go down.
Wilson said that EMS is considering adding another full-time staff member to offset overtime hours, but the department needs to have revenues first to cover that cost.
According to Fire Chief Rick Bloemker, the Highland Fire Department is in very good shape after recently purchasing new SBA and bunker gear. Last year, the department wanted to replace a truck, but he said, the vehicle slated for replacement is still functioning very well.
The city’s general administration has $35,000 budgeted this year for the construction of the veteran’s memorial kiosk being raised at Dennis H. Rinderer Park.
According to Finance Director Kelly Korte, intergovernmental taxes have been coming in on time, but there has been a change in the city hotel/motel tax. The tax was budgeted, but in the last year the city saw the biggest decline in the tax, as funding from the tax was at a $250 deficit.
According to Korte The only location the city receives the tax from is the Baymount Inn, and those funds are now even less than they used to be when the business was a Holiday Inn. Korte said they are also slower to pay.
This year the tax presents a balance of $22,000 for other projects. Because of this, Korte said that she and Latham made an across the board reduction of 30 percent for all groups who made funding requests from the hotel/motel tax. The only reduction that was not made was for fireworks.
However, the council members opposed the fact that the Highland Chamber of Commerce did not receive a 30 percent reduction of their portion from the hotel/motel tax, which was $20,000. The also said that the Highland Community Chorus, who requested funds from the tax, did not bring tourists to Highland who stay overnight, therefore they said they should not receive money from the fund.
If the reduction from the Chamber is made and the Community Chorus request was taken out of the picture, the council said it would leave more room for miscellaneous funds, in case a new event or group comes to the city.
Miscellaneous / Library
Korte said the budgets for miscellaneous funds reserve accounts like TIF districts, library, Cemetery Board of Managers, police pension, IMRF, and solid waste disposal.