Belvidere seeks additional revenue for pension payment hike

By Bob Balgemann

REPORTER

Budget and Finance Director Becky Tobin delivered some disturbing news to committee of the whole members at their Oct. 24 meeting.

Here are the salient points:

Numbers

A $233,513 increase in police and fire pensions is being projected for the 2017-18 fiscal year. The tax levy has $71,634 for that purpose, leaving a shortfall of $161,979.

Deadline

City council had until Nov. 7 to decide what its property tax level will be for the next fiscal year.

Dilemma

There is a problem in finding the money to make up the pension deficit.

Tobin explained that she has always tried to follow the property tax extension limit law (PTELL), even though Belvidere as a Home Rule city does not have to do that.

The decrease in property assessments since the Great Recession of 2008, low consumer price index (CPI), and minimal new construction on the tax base has made that revenue relatively flat in the last few years, she said.

“We have been able to get by with the help of other revenue sources,” Tobin said. “However, the increase in the police/fire pension contribution requirements are putting a strain on our revenues.”

While working on the 2017-18 budgets, she said she began “to realize what an issue we may have.”

Alderman Clayton Stevens remembered when he was the pension secretary and for years sent letters to the city administration on how much money was needed to meet the pension payments.

“Administrations have thrown this [requirement] down the road to us, and now the can isn’t being kicked anymore,” he said.

Yet he was optimistic, adding, “We’ll figure it out.”

“Absolutely right,” Mayor Mike Chamberlain interjected.

Alderman Mark Sanderson favored staying within the PTELL cap.

“I’d like to find some other solutions to the problem,” he said. “We need to be good stewards and keep our word when we tell people what we’re going to do. I think we can be creative.”

Stevens asked what kind of reserves the city currently had.

Tobin replied that some $300,000 was carried over from the 2015-16 fiscal year. Reserves helped fund some infrastructure projects.

“We should have six months of reserves after this year,” she said.

The current fiscal year ends April 30, 2017.

Sanderson said the city needed to figure a way to make money off nearby Interstate 90.

However, City Attorney Mike Drella said raising taxes on the Oasis was questionable.

“I’m still researching that,” he said.

As a Home Rule city, with more than 25,000 residents, Alderman George Crawford wondered about a small tax increase on tobacco and alcohol, and using it solely for pensions.

The short answer from attorney Drella was “yes,” but he said the city could have done that in the past, as a non-Home Rule municipality.

“To me, Home Rule is not on the taxation side,” he said. “It is on the economic development side, on the quality of life side.”

He pointed out that not long ago, voters in Belvidere Community Unit District 100 approved a one percent increase in the sales. It was estimated that 40 percent of the revenue would come from non-residents.

That’s the concept being advanced by Alderman Sanderson, he said, to have a recurring source of revenue that’s provided mainly by non-residents.

Alderman Ron Brooks said he’d like to see more money stay in Belvidere, rather than being spent elsewhere. His idea was to check on landlords who don’t live here, yet “leave town with a fist full of cash [from rents] and spend it wherever they come from. There are a substantial number of rental properties [in Belvidere] and people get rich off them. They [landlords] don’t pay property taxes. They just bump up the rents.”

He suggested that the city form a committee, which would come up with some ideas on how to raise more revenue for Belvidere.

Sanderson thought the city should explore the options it has as a Home Rule community.