Review of the East Dubuque budget with a focus on the general fund

What are the issues with the 2020-21 East Dubuque city budget which projects deficit spending in its general fund?

The city is anticipating general fund revenue of $1.407 million and expenses of $1.724 million. The budget, as approved on Monday, April 27 has a budget deficit of $317,076.

 

When was the last time the

general fund showed a surplus?

In the 2015-16 fiscal year, the general fund last showed a surplus of revenues over expenses of $131,912. Deficits for the following years were: 2016-17, $80,024; 2017-18, $70,835; 2018-19, $321,955; and 2020-21, $246,168.

 

When does the city’s fiscal year start and end?

The fiscal year starts on May 1 and ends on April 30.

 

What is the purpose of the general fund?

The general fund, in essence, is the heart and soul of the city’s budget. It includes revenue and expenses for city administration; police, fire and ambulance protection for the citizens; and public works services.

 

What have been the city’s overall fund balances?

On April 30, 2019, the city’s fund balance was just over $1.29 million; and April 30, 2020, $786,000. The project balance for May 30, 2021 is $584,000. Loras Herrig, East Dubuque city manager, says the city should have six months of reserves, which would total $2.4 million.

 

What other funds does the city have?

The city has funds for audit, insurance, Illinois Municipal Retirement Fund; Social Security; parks/playground, Gramercy Park Fund; motor fuel tax; civil defense; drug and DUI enforcement; vehicle replacement; drug and DUI equipment fund; TIFF, capital projects, water, sewer, garbage and stormwater.

 

When the city runs a deficit

in its general fund, what happens?

Money is pulled from other funds.

 

What is the COVID-19 pandemic

impact on the East Dubuque budget?

The pandemic will diminish the city’s income, but no one, at this point knows how much. Sales tax and video gaming revenue have been and will be impacted.

For the fiscal year ending April 30, the city projected sales tax revenues of $522,138. The new budget expects revenues of $475,000.

The city also had high hopes of collecting $150,000 in video gaming revenue in the new fiscal year. It projected $124,895 during the past fiscal year and is budgeting $104,000 for the coming year. That revenue is targeted for fixing the city’s streets.

What won’t be impacted will be property tax revenues for the general fund. Those rates are already set.

In all, the city expects to take in $23,000 less in the new fiscal year.

 

What has been the revenue

into the general fund?

2015-16, $1.49 million; 2016-17, $1.31 million; 2017-18, $1.26 million; 2018-19, $1.22 million; 2019-20 projected, $1.44 million; 2020-21 budget, $1.41 million.

 

What has been the spending

from the general fund?

2015-16, $1.35 million; 2016-17, $1.39 million; 2017-18, $1.32 million; 2018-19, $1.55 million; 2019-20 projected, $1.68 million; 2020-21 budget, $1.72 million.

 

What does the administration

segment of the general fund include?

Administration expenses include wages and benefits for the city manager and city office staff, engineering services, legal services, other professional services, postage, telephone, utilities, building expenses, software and other general expenses having to do with the day-to-day operation of the city.

 

What has the city been

spending on administration?

2015-16, $364,404; 2016-17, $315,109; 2017-18, $320,295; 2018-19, $410,932; 2019-20 projected, $398,692; 2020-21 budget, $362,858.

 

What increases have there been in

wages and benefits for city administration?

Advertisement Advertisement

In 2016, the city administrator received compensation of $66,487. Staff wages were $76,573. In 2020-21, the manager’s salary will be $67,600. Staff wages will be $85,446. Health insurance has steadily risen from $46,026 in 2016 to $61,772. The city periodically seeks bids for health insurance. Pay for city officials in 2015-16 was $12,225; $16,965 is budgeted for the new fiscal year.

 

What are the other areas of the

administration budget worth noting?

Anytime the city engages in a public project, engineering services are generally needed. The amount of money spent on engineering services fluctuates. In 2015-16, the city spent $84,033 on services and in other years nothing. In 2020-21, the city plans to spend $25,000.

In 2015-16, the city spent $9,413 on legal services and has $24,000 budgeted for this year.

The “other professional services” line item also varies from year to year anywhere from a low of $2,974 in 2017-18 and $35,700 in the last fiscal year. For the coming fiscal year, $25,000 is planned. This line item would include fees paid to a grant writer to prepare documents for grant applications for projects such as wastewater treatment plant repairs, water tower construction and water and sewer extension.

 

What has the city been spending

on its police department?

2015-16, $374,815; 2016-17, $454,807; 2017-18, $431,545; 2018-19, $574,917; 2019-20 projected, $543,260; 2020-21 budget, $566,631.

 

What increases have there

been in wages and benefits?

In 2015-16, the police chief earned $68,010 and in the new fiscal year, $72,793. Officer wages have fluctuated from $184,370 in 2015-16 and will be $244,062 this fiscal year. Health insurance was $84,177 in 2015-16 and will be $131,142 in 2020-21.

 

Why the increases?

The East Dubuque Police Department has not been fully staffed for a number of years, which impacts wages. The city has hired two new officers. They were one week shy of completing training before the pandemic started and can’t be fully certified until training is completed.

Herrig has given Police Chief Luke Kovacic a mandate to deal with drug issues in East Dubuque.

The city also expects to spend half as much on overtime in the new fiscal year as it did last year: $42,500 versus $85,573.

Herrig told the East Dubuque City Council, “Increased enforcement costs money. Stopping drugs costs money. We want drug offenders and criminals to know that they are not welcome here.”

Health insurance costs are increasing, because the department will be fully staffed and they are rising in general. Health insurance for the officers is purchased through the Teamster’s Union and is less than health insurance purchased for other city staff.

Other line items in the police budget include uniform allowance, building and vehicle maintenance, professional services, general office expenses, dues and memberships, travel and training, software and vehicle purchase.

 

What is the city spending on its fire department?

2015-16, $144,263; 2016-17, $118,119; 2017-18, $112,378; 2018-19, $160,933; 2019-20 projected, $154,840; 2020-21 budget, $265,027.

 

Why is the department’s 2020-21 budget

significantly higher than previous years?

The new budget includes a line item for “building acquisition and improvements” totaling $160,000. This is to purchase downtown property for a new fire station.

A committee of firefighters and city council members have been studying the need for a new fire station. Neither of the city’s two fire stations is large enough to house modern fire fighting apparatus nor meet the needs of firefighters.

“We eventually need to get to the point where we need to replace apparatus,” Herrig said.

Without the $160,000 line item, the city plans to spend $105,027 on its fire department for the fiscal year.

 

What has the city been spending

on its ambulance service?

2015-16, $35,881; 2016-17, $136,507; 2017-18, $33,203; 2018-19, $39,583; 2019-20 projected, $81,441; 2020-21 budget, $72,905.

The service is expected to nearly break even producing revenue of $69,525. The goal is for the service to break even.

 

What does the city spend on

its public works department?

2015-16, $362,131; 2016-17, $305,762; 2017-18, $337,46; 2018-19, $271,92; 2019-20 projected, $414,360; 2020-21 budget, $382,087.

The budget fluctuates through the years due mostly to new equipment and vehicle purchases that are made from time to time. Total employee wages in 2015-16 totaled $111,134; budgeted for 2020-21 are wages of $159,226. Anticipating two upcoming retirements, the city hired an additional person to begin learning the water and sewer departments. After the retirements, the department will return to four staff members.

Health insurance has also increased from $32,551 in 2015-16 and is budgeted for $64,811 this year.

Other line items within the budget include maintaining city property including streets, engineering services, general office expenses, supplies, tools, software and vehicle and equipment purchases.

 

What does the city spend on flood protection?

2015-16, $6,150; 2016-17, $16,858; 2017-18, $2,942; 2018-19, $37,475; 2019-20 projected, $31,275; 2020-21 budget, $31,250.

This increase has taken place, because the city is putting greater effort into maintaining its flood protection system. Line items include maintenance of equipment and utility system, engineering and contractual service, utilities, rental and supplies.