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EAST DUBUQUE, Iowa–The city of East Dubuque has a problem, a $317,076 deficit in its general fund. Now, the city council and City Manager Loras Herrig are looking for solutions.
After approving the budget on Monday, April 27 with the deficit–the city had to submit a budget to the state by Friday, May 1–the council held a special meeting on Thursday, April 30 to begin looking at how to balance the budget.
Herrig has told the council that there is no “magic bullet” and the solution will come on both the revenue and expense sides of the ledger.
At the April 30 session, Herrig took an hour to go through the general fund in great detail explaining the income and expense sides. Due to the pandemic, he expects revenues in some areas, such as sales tax and video gaming, to drop. Budgeting for revenue at this time is difficult because there are so many unknowns with the pandemic.
He also reviewed all of the city’s other funds for the council’s benefit.
He noted, “We are now currently covering our general fund deficit with TIF funds and that’s not allowed,” he said.
The good news, he noted is that the city has little debt. The city has a zero-percent loan for the new ambulance it’s purchased and is paying three-and-a-half-percent interest on its loan for city hall.
He believes the city needs to grow revenues and much of that needs to come from growth, he continued. That’s why there has been an effort to improve infrastructure through upgrading the wastewater treatment plant, build a new water tower, which would equalize water pressure.
Once infrastructure is improved, the city can begin working with developers and annexing adjacent properties and begin annexing.
Council members and Herrig have been sharing ideas including raising the sales tax, creating a wheel tax and raising utility rates as well as layoffs, staff reductions and early retirements. Herrig will not receive a raise for this fiscal year and council member Robin Pearson has offered to forgo her stipend for serving on the council.
Herrig is preparing a list of motions which the council can consider at its May 18 meeting.