The proposed budget for fiscal year 2018-2019 for the city of Highland has $54.6 million in total expenditures, which is a 20 percent increase over last fiscal year.
The city will hold a public hearing for the budget, which is now on display at City Hall, at the Highland City Council meeting on April 16 . During the meeting, the council will also vote to adopt the budget.
City Manager Mark Latham said the proposed budget reflects an effort to help growth, infrastructure improvements, and maintaining the city's assets.
"There are some big projects out there," Latham said.
Overall, the budget projects about $12.8 million in capital expenditures for next year. Latham said the majority of these projects focus on the city's sewer and water divisions.
For sewer, the budget includes over $7.4 million in projects. Of this cost, about $5.7 million will go to improving and upgrading the city's Water Reclamation Facility, whereas $1.6 million is set for rehabbing the city's sewer trunk mains, and the smaller remaining clay pipes. Overall, the whole sewer system project is estimated to cost about $11 million.
"If it progresses as planned, we should be out for bid sometime this year," said Director of Public Works Joe Gillespie.
To pay for the project, the city plans to take out a loan through the Illinois State Revolving Fund (SRF). The loan is expected to have a 1.85 percent interest rate and will be paid over the next 20 years. If the city adjust payments for inflation, it is said the project can be done without rate increases.
"There are a few steps to clear with the IEPA before our application can be processed," Gillespie said.
The other $157,500 of sewer investments include an easement machine, a sewer camera and a compact tractor purchase.
As for water, about $1.7 million worth of water main replacements are budgeted.
"The city has requested submittals from banks to secure a loan for the water main project," Gillespie said.
This loan will be paid over a 20-year period. The note will be paid for with yearly water rate increases of 1.5 percent, according to Gillespie. With these rate increases, the city can cover about $8.15 million worth of rehabilitation. The water fund also budgeted a $725,000 water transmission main relocation.
Smaller investments at the water treatment plant are budgeted to cost $266,297 and include replacing a boat, various chemical and water pumps, and maintenance to a standpipe, an elevated tank and a ground storage tank.
Other notable capital investments are in the street and alley division, the fiber optic fund, the Light & Power Department, and the Parks and Recreation Department.
Other budget points
Aside from capital projects, the budget projects operating and maintenance expenses at about $33.4 million, which is a 4 percent increase. Operating revenues are also expected to increase by 4 percent to an overall value of about $41.5 million.
The budget projects the city's sales tax collections to go up 6 percent to $2.66 million, while the city's non-home-rule sales tax will likely stay the same at about $1.4 million.
"This reflects the fact that Highland's retail base is still strong and will continue to increase as new businesses are added to our retail offerings," Latham said.
The budget also projects the city's collection of property taxes will go up 4 percent to about $4.4 million.
For state income tax, the expected amount coming to the city is about a 2 percent increase to $1.12 million.
Overall, total city revenues are projected at about $55.4 million, leaving the city with an estimated surplus of about $863,370 at the end of the fiscal year. The city also expects to transfer $1.9 million to reserves.
"We continue to effectively manage the city's financial integrity, and hopefully, be prepared for anything that might happen in the future," Latham said.
As for debt, on May 1, the city will have a remaining debt service balance of about $21.8 million.
In fiscal year 2011, $3.2 million in alternate revenue bonds were issued for construction of Veterans Honor Parkway. These funds and an existing 2007 street bond issue were used to continue the the city's "peripheral route." Other bonds with outstanding balances include those used to purchase the Korte Recreation Center, which mature in 2020; bonds issued in 2013 for sewer line improvements; and two fiber-optic system bonds.
In recent years, the city shifted its classification of debt, largely to revenue bonds. Due to this, the city's legal debt margin at 100 percent availability, according to the budget. Only general obligation debt, which requires voter approval, counts against this margin. The statute set margin is based on 8.625 percent of the city-wide assessed value.
In April 2017, the city's assessed valuation was $180 million. Over the past 10 years, the average annual percentage increase of the city's overall assessed value is 1.19 percent. The city is anticipating a 1 percent increase in assessed valuation this year, based on prior years.
The Department of Public Safety's budget goals include researching uses for the new public safety sales tax.
The city will begin collecting the new 1/2-cent sales tax this year, though the city will only get funds for a portion of the year. The tax will be collected starting on July 1, according to Latham, but the city will not start seeing money until Oct. 1. In the budget, the tax is projected to bring in about $400,000 for FY 2018-2019.
"We are anticipating about $700,000 for a full year," said Kelly Korte, the city's director of finance.
While some of the funds are expected to go toward equipment purchases and business district development, they will also be used to renovate Fire Station No. 1, located at 1115 Broadway, and build a new public safety facility, for which the total project cost is estimated to be about $7 million.
The budget indicates that the Highland Police Department gets about 12,500 calls in a fiscal year.
The only capital purchase the department shows for next year is a $30,000 vehicle replacement. But, Police Chief Terry Bell said budget initiatives also include 25 percent of the cost for a school resource officer at Highland schools next school year, expanding the city's camera project, purchasing a cellular data retrieval system for investigations, purchasing a unmanned traffic speed and traffic counter, maintaining IT structure and the quality of the department's equipment. Bell also indicated wanting to send Lt. Chris Conrad to Southern Police Institute for staff and command school.
Highland EMS projects a 20 percent increase in revenue next year due to ambulance rate increases approved by the council in January, according to Highland EMS Chief Brian Wilson.
"The rate increase was designed to bring in enough revenue to replace ambulances and other expensive equipment, such as cardiac monitors," Wilson said.
EMS equipment purchases for next year include $70,000 for cardiac monitors and $46,981 for initial lease costs for a ambulance replacement.
The Highland Fire Department expects a 62 percent increase in revenue, as it is budgeted to receive half of the monies generated by the new sales tax.
In fiscal year 2017-2018, the fire department had 184 responses, of which five were house fires, two were vehicle fires, 42 were false alarms and 135 were miscellaneous calls.
The budget shows no fire-related capital purchases for next year. However, Fire Chief Rick Bloemker said the city needs to begin budgeting to replace its oldest fire truck within the next two or three years. The item was placed on the budget year for 2022-2023, for $650,000. This year, the fire department plans to save about $217,000 in its reserve account. Over the next four years, the department expects to save about $370,000 each year.
Bloemker said he plans to maintain a 35-man firefighter roster. In addition, he wants to work on purchasing additional sets of bunker to help reduce the volunteer firefighter exposure to carcinogens and decrease their risks for cancer.
The city's fiber optic fund, also known as Highland Communication Services, expects about 8 percent revenue increase over 2017-2018, with total revenues at about $2.4 million. However, the fund is also expected to operate at a deficit at least until 2023. Next year, that deficit is said to be about $1 million.
About $1 million of the $3.4 million HCS budgeted for expenses will go to bond debt repayment. The fund's budget also shows that the city is expecting to buy about $70,000 of fiber distribution equipment, as well as $80,000 for line repair and new lines..
Major initiatives for the fiber fund include completing the build-out project to bring HCS to every corner within the city limits. In January, the council approved an engineering contract for services needed to plan the build-out. The project could bring HCS about 763 additional potential customers.
Other initiatives include starting a retention and growth program, reducing lag time for new service, initiating social media marketing, limiting unplanned overtime to less than 20 percent of personnel costs, and starting a "cord awareness" program.
Director of Technology and Innovation Angela Imming said she also wants to start a contract with at least one business for back-up services at HCS's data center.
The city plans to collect about $2.7 million in water revenue and about $2.3 million in sewer revenue.
As mentioned above, water and sewer have large capital investments budgeted for this year, while there are an expected $347,850 in street and alley capital improvements. These projects include a roundabout at the intersection of Broadway, Veterans Honor Parkway, and Iberg Road. The city budgeted $128,500 for the project cost this year, which is reimbursable through federal safety funds.
Other improvements include purchasing a new dump truck and street sweeper at a total cost of $129,350. Another $90,000 is budgeted to go toward storm drainage, seal coating, and sidewalk projects.
Of the $1.4 million the city expects to collect from non-home rule sales tax, $670,000 will be used for resurfacing, street maintenance, sidewalk replacement and pavement preservation. About $475,000 of these monies will go toward a future traffic signal at U.S. 40, Hemlock and Frank Watson Parkway.
The city's Department of Light and Power is projected to take in $14.82 million, which is about a 2.5 percent increase over last year.
Light and Power has also budgeted about $847,000 worth of capital projects for next fiscal year. These projects include a $250,000 investment in smart meters, which allow meters to be read remotely from desktop. In his division goals, Director of Light and Power Dan Cook said the city hopes to eventually add 1,000 additional meters. A rehabilitation of a substation transformer and its load tap changer was also budgeted for $125,000.
Other projects the department has set aside funds for include evaluating and replacing aging or bad poles, which are estimated to make up 20 percent of the system, repairing transformers in all substations, new electric lines, adding 150 LED streetlights, building lighting improvements, purchasing a Tantalus server system and a mini excavator, as well as other miscellaneous control devices.
The department's budget indicates the cost of many of these projects is spread out over the next five years.
Parks and Recreation
The Parks and Recreation Department has about $112,000 of projects for fiscal year 2018-2019.
Theses projects include about $50,000 for an all-abilities playground at Dennis H. Rinderer Park on Veterans Honor Parkway. Director of Parks and Recreation Mark Rosen said said this cost is based on donations pledged.
The other $62,000 includes a comfort station at Silver Lake Park and playground resurfacing at Glik Park.
Rosen said he would like to install a natural trail around Old City Lake and work on upgrading the Silver Lake Trail.
"The most pressing priorities are the ones that address major repairs to aging facilities and then those that can enhance an already established facility," Rosen said.
At the Korte Recreation Center, Rosen outlined installing a new water heater for the pool, replacing the water line for the building's sprinkler system, and purging equipment. For the coming years, starting in FY 2021-2022, Rosen said he would like to look at eventually expanding the center.
"Based on a very general estimate three years ago, $3 million is realistic," Rosen said.
At the outdoor pool, aside from repairs, Rosen said he hopes to start looking into a new pool, as well as possibly offering Highland High School access to the pool for fall training and elementary school physical education classes.
For the city cemetery, Rosen said the city will continue work on renovating old headstones and work on preventing mud from washing into the cemetery's entrance road.
Building and Zoning
The city's Building and Zoning Department budget initiatives include the launch a new rental inspection program.
The department also budgeted $60,000 to continue evaluating structures that require demolition and mitigating derelict properties.
Current tax figures (as of March 2018), who that sales tax increased 1.85 percent over the prior year, non-home rule sales tax saw a decrease of .27 percent, while state income tax raised 3.12 over the prior year, according to Korte, the finance director. Korte also said the city's simplified municipal telecommunications tax decreased 10.26 percent.
The city's general administration fund has set aside $18,000 to upgrade of the sound system in the council chamber's at City Hall. Citizens, city officials, and council members often complain about the poor acoustics in the council chambers. The city has considered upgrading the system for several years.
The general admin budget also reflects that the city's hotel/motel tax is expected to raise $6,000 to $48,000, which is the first time in two years an increase has been expected. The city saw it's biggest dip in the tax in fiscal year 2016-2017 when it fell $10,000.
While the city receives hotel/motel taxes from The Tibbetts House, Korte said the Baymount Inn provides the most of the funds.
"They are seeing an increase in usage," Latham said.
The tax provides funding largely in part to the Highland Chamber of Commerce, and other events and organizations related to tourism.
This year, the chamber received $22,000, which is a $2,000 increase from last year, and $8,000 higher than the year before that. However, before the dip in the tax, the chamber received $28,000 worth of funding.
Other things that will get hotel/motel funding include the Art in the Park, the Madison County Fair, the Highland Optimist Shootout, gun shows, swap meets, fireworks displays, marketing for the rec center, billboards and other miscellaneous items.