Elgin Council OKs 2012 city budget

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Updated: January 23, 2012 11:06AM

Performing the final act in a drama that began at a retreat in June, continued in early fall with a resident budget task force, and culminated with a series of meetings in November and December, Wednesday night the city council approved Elgin’s $268.5 million budget plan and various measures related to it.

Mayor Dave Kaptain said he talked to hundreds and hundreds of people during the process who offered ideas and thanked the diverse task force.

“This budget will not be perfect. We shall see some changes over the course of the year,” Kaptain said.

The lone nay vote on the overall budget was Councilman John Prigge who objected to new fees for garbage collection and utilities and to a $120,000 increase in money available for nonprofits which he said could pay for several Fourth of July fireworks displays.

“With these changes, we will be able to maintain a high level of service to the city,” Councilman Robert Gilliam said.

“Overall I think we’ve done a very good job...It’s the best budget for the citizens of Elgin at this time,” Councilman Rich Dunne said.

The adopted budget shifts the city’s reliance on property tax as a funding source from 43 percent to 25.5 percent of all collected revenue in the process, something which Councilwoman Tish Powell mentioned.

As such, an average home will face about $63 annually in electricity and natural gas charges assessed by the city. In a referendum next spring voters might give the city the chance to purchase power from ComEd or other suppliers at a lower bulk rate, which could reduce such user fees.

Starting in July, the retail sales tax charged by the city will rise from .75 to 1.25 percent. This increase is supposed to provide approximately $1.7 million per year that will be dedicated to street improvements.

Garbage collection, which currently is not charged out separately to residents, will become $13.30 per month for a household in 2012, which should save the city more than $4.5 million — or what the initial estimate of the annual structural deficit had been.

Those living in neighborhoods where the city collects leaves raked into the street will pay $24 a year for the service. Next year, drinkers will pay a 3 percent tax on each adult beverage ordered when they head out to a bar or restaurant. And the senior property tax rebate program using casino money effectively is over in 2012.

The budget calls for cuts of about $4.8 million, including workforce reductions that will total about $1.7 million in salaries cut. Thus far, the specific positions to be made redundant have not been revealed.

The budget also eliminates $677,000 in subsidies to the Recreation Fund and reduces Elgin Area Chamber of Commerce funding by $125,000, to $275,000 for its role overseeing the city’s economic development work. The latter agreement is to be reviewed by the council at its second meeting in January.

The new plan also features a $250,000 city-administered grant program dedicated using Grand Victoria Casino money to fund social service and non-profit agencies. Another $50,000 in funding will be set aside for cultural arts groups. The $300,000 is $13,000 more than outside agencies received from Elgin in 2011. Funding for these agencies is taken from Riverboat proceeds.

The budget stabilizes the property tax levy at $47.25 million, a $3 million reduction from the $50.1 million peak year levy in 2010. A riverboat fund transfer to the general fund is $3.7 million in the 2012 budget, a $2 million increase in transfer that allows the property tax levy to remain at last year’s level.

Several Elgin establishment owners came to complain that the liquor tax would make it hard to compete with other towns.

Greg Shannon, owner of Elgin Public House downtown, said that he will turn a small profit this year, but costs are soaring and margins growing thinner in recent years.

Elgin’s budget moves also drew the attention of conservative anti-tax activist Grover Norquist who this week posted on his Americans for Tax Reform website that “Elgin is trying to tax the joy out of the holidays.”