Proposed budget for FY24 presented to finance committee in O’Fallon

A proposed FY24 budget for $93,789,254 reflects expenditures in all funds that are equally balanced by revenues.

That is a 10.5% decrease from last year’s O’Fallon budget and is mostly due to the $4.2 million in the American Recovery Plan Act funds.

The budget does not include the Build O’Fallon Trust Fund plans.

Finance Director Sandy Evans explained the budget plans and process at the O’Fallon City Council’s Finance and Administration Committee Monday night. Individual departments will begin reviewing their budgets.

According to the plan, the budget will be up for first reading at the April 3 council meeting, with final approval and public hearing possibly April 17, but will be reviewed and discussed beforehand. The Finance Committee’s final review will be March 27. The budget goes into effect May 1.

The largest expense is the General Fund of $26,666,479. The general fund contains most of the operating functions of the city.

Here is the projected breakdown:

• 01 General Fund 3,004,795
• 50 Administration 2,146,026
• 51 Police Department 8,353,518
• 52 Streets 4,552,283
• 53 Facilities 3,264,344
• 54 IT Department 2,036,111
• 56 Community Development 1,507,187
• 57 Fire & Police Commission 7,500
• 59 Cemetery 254,829
• 60 MECOMM 1,539,886

Personnel cost is the biggest expense — 30%, with capital spending 17%, operations 16% and equipment 13%.

Revenue resources are sales tax, per capita share of the state income tax and state use tax, utility tax, food and beverage tax, and MECOMM reimbursement fees.

A 9% projected increase in food and beverage tax is why FY24 revenue is listed as $1,200,00. Evans said that is conservative but based on new openings.

Sales tax should bring in $9,300,000, even with removing Auffenberg. A 9% increase is projected because of the Wayfair Act. It also includes a 4% decrease due to speculated recession, Evans noted.

According to the Taxpayers Federation of Illinois, the Wayfair Act means tates may be able to force more retailers to collect tax that is already due. It is not a new tax, or a tax increase.

State Use Tax is projected at a 2% increase, $1,050,000, per Illinois Municipal League estimates. State Income Tax is projected for 16% increase, $4,500,000.

Utility Tax is listed as a 3% increase, $1,850,000.

More numbers

There are consistent declines in cable franchises because of streaming not being taxed. Cable franchise fee is listed at $380,000. Likewise, consistent decline in landlines is reflected in phone franchise fee of $265,000 income.

However, the popularity of video gaming is reflected in an 18% increase of $235,000 income. But there is no increase in video gaming licenses because of the limit on machines.

More electric vehicles is also affecting the motor fuel tax funds, although a 2% increase, $1,325,000, is targeted.

The hotel/motel tax could see a 29% increase of $1,600,000 for the original 5% tax. But the additional 4% could bring in 26% increase, $1,250,000.

Parks Home Rule Sales Tax projects a 53% increase, $1,400,000, based on 12 months.

The departments requesting new positions in the coming year are Public Works — a maintenance worker at the sewer plant, and EMS — four emergency medical technicians. The total costs with benefits are $500,000.

The bond debt relief is $3,406,410.

Fund Description Revenue Expenses

• 01 General Fund 26,666,479
• 02 Park & Recreation 5,286,485
• 04 Library 1,506,365
• 06/07 Cemetery Trust & Agency 30,000
• 08 Fire Department 2,115,070
• 13 IMRF 726,100
• 14 Prop S 3,791,000
• 16 Motor Fuel Tax 3,624,500
• 17 Ambulance 3,636,093
• 25 Social Security 1,178,030
• 31 Water Department 16,317,107
• 34 Sewer Department 16,286,381
• 39 Special Service Areas 65,200
• 51 Economic Development/Tourism 2,892,000
• 55 Public Safety Bond Debt Service 893,700
• 61 Special Service Area-Shoppes at Greenmount 147,675

Bond Debt Service

• 62 Special Service Area-Greenmount Commercial 32,235
• 63 Special Service Area-Regency Extension 98,935
• 67 Special Service Area-Newbold Toyota 162,200
• 68 Convention Center Bond Debt Service 481,110
• 69 Sportspark Bond Debt Service 912,570
• 71 Special Service Area-Harley Davidson 133,700
• 72 Park Dedication 80,000
• 73 Annex Fees 107,500
• 74 Ohlendorf Bequest 50,000
• 77 Public Safety/Sports Park Bond Debt Service 143,100
• 78 Strategic Plan 212,000
• 44/81 Police & Fire Pension 2,281,874
• 82-85 Police Restricted Funds 204,500
• 86 Infrastructure Bond Debt Service 560,735
• 87 Destination O’Fallon Bond Debt Service 655,610
• 100-103 Tax Increment Financing (TIF) 2,511,000
• Total Balanced Budget 93,789,254

Build O’Fallon Trust Fund Poll

In November 2021, the council approved a half-cent sales tax increase as part of the Property Tax Relief Program and Build O’Fallon Trust Fund initiative.

The tax levy was reduced by $680,000, which was the parks portion and was replaced with 0.25% of the new Home Rule sales tax.

The other 0.25% of the sales tax was deposited into the Build O’Fallon Trust Fund to be used for council-approved unfunded capital projects that align with the 2040 Master Plan. The intent is to grow the fund over time for any future projects.

Following the guidelines, the city will have $718,000 to spend on projects in Fiscal Year 2024. These monies can be spent on one project or multiple projects at the council’s discretion.

To decide which project (if any) to fund in Fiscal Year 2024 (May 1, 2023 - April 30, 2024), the aldermen participated in a poll. The council can select a project not listed in the poll or they can opt for no spending during the fiscal year and allow the fund to grow.

Additional projects

The following projects were considered:

• Pickleball courts ($300,000): Six new pickleball courts to supplement the existing courts at Hesse Park (six votes).
• Improvements to O’Fallon Station Plaza ($165,000): New concrete patio area with sunshade, new entry wall and welcome signage, sunshade covers for an existing patio in rear, and additional seating and amenities (five votes).
• Sports Park Parking Lot and Pond Renovation ($575,000): New parking lot on the northeast corner of the Sports Park (two votes).

Other items mentioned included improvements to the old city park, more pickleball courts, more streetscape downtown and an amphitheatre, streetscape and more improvements to O’Fallon Station and parking.

City Administrator Walter Denton said based on the poll results and available funds, there is enough money in this year’s Build O’Fallon Trust Fund allocation to proceed with both the pickleball courts and the O’Fallon Station improvements at a cost of $465,000. The balance would remain in the account.

Alderman Eric Van Hook said it should be decided by the whole council, not just those on the Finance Committee.

Whether it will be two or all three recommendations will be decided at a later time.

This story was originally published February 28, 2023 at 4:50 PM.