The city of Highland’s budget for the next fiscal year plans a 7.3 percent decrease in spending over the the current year, but still falls $877,000 short of revenues meeting expenses. A transfer from reserve cash will make up the difference.
The city is projecting to spend $47.4 million in the next year, down from $51.1 million from the current year.
The budget decrease is due mainly to work being completed on various street projects and that construction of the Veterans Honor Parkway (the northeast portion of the city’s peripheral route) is nearing completion, City Manager Mark Latham said.
However, next year’s budget anticipates a 5 percent increase in general operating and maintenance expenditures for the city, while projecting an 8 percent decrease in operating revenues. The revenue decrease is mostly due to large projects being completed for which the city received large amounts of grant money.
All other revenue streams are predicted to increase.
Property tax collections are expected to increase by 9 percent, despite a lower assessed valuation. The proposed levy for next year is just over $4.1 million. The adopted levy for this year was $3.78 million.
As of the most recent figures released in April 2014, the city-wide assessed value is $176 million, down 2.8 percent from the prior year. Over the past 10 years, the average annual percentage increase in assessed value is 3.4 percent. In addition, the property tax rate of $1.9544 per $100 of assessed value for the tax levy year of 2013, collected in 2014, is lower than the rate was eight years ago in 2005, when the tax rate was $2.083 per $100 assessed valuation.
City leaders are assuming that sales taxes collections will be at $2.4 million in the next fiscal year, which would represent a 2 percent increase over the prior year.
State income tax is projected at a 5 percent increase for 2016, based on current collections and anticipated economic rebound. That is subject to change, however, as Gov. Bruce Rauner has said he wants to cut the amount of income tax money that goes back to local governments.
The city is actively monitoring possible reductions in state funding, Latham said.
“We will be ready to react accordingly if the city loses some of this needed funding,” he said.
Keller Construction, which broke ground on the $6.5 million Veterans Honor Parkway in August 2013, is expected to complete the new road, which will extend Iberg Road from Michael Road to Troxler Avenue, by June 30
The city also plans to continue upgrading its sanitary sewer system this summer. In July 2013, the City Council voted to move forward with a plan to sell approximately $3 million bonds for the first phase of its plan to rehabilitate the system. The council also passed a sewer rate increase to pay for it.
The overall plan for sanitary sewer system is divided into three phases, which will be spread out over the next dozen years, and is expected to cost $17 million when all is said and done. The first phase of the sewer rehabilitation project will be completed by early spring. The next few years of sewer collection revenue will be used to replenish the fund in anticipation of the next major phase scheduled for 2018.
The Street and Alley Department is planning to start several other road projects during the coming fiscal year, including:
• Beginning reconstruction of Sportsman Road from Plaza Drive to Koepfli Lane;
• Adding turn lanes at the intersection of Illinois Route 143 at Koeplfli Lane and Troxler Avenue;
• Beginning engineering for reconstruction of Oak Street from Maxim Street to Pain Drive;
• Replacing a skid-steer loader and dump trump; and
• Installing a new canvas arch on top of the materials storage building.
In the meantime, several projects are planned for the coming fiscal year at the Water Treatment Plant. The city plans to:
• Continue replacing valves, pumps and equipment installed during the last plant upgrade to the plant in 1992.
• Install security cameras.
• Continue preliminary engineering for construction of a new clarifier unit and begin construction.
The city will also conduct a water rate study to comply with anticipated Illinois Environmental Protection Agency’s state-revolving loan request and potential water main replacement program budgeting.
The city is also looking at making water main replacements along Broadway, Zschohkke Street, Beech Street and Monroe Street.
The Highland City Council on Monday will hold a public hearing on the proposed budget, starting at 7 p.m.
After the hearing, the City Council is expected to adopt a budget ordinance, approving the budget.
A copy of the proposed budget is available for public inspection at City Hall.