WASHINGTON, Ill. (WMBD) — By using reserve funds, the City of Washington is making sure its $24,613,158 2020-2021 budget does not end in a deficit.
City leaders say by using $3 million from the general fund and funds built up from water & sewer taxes, the City’s TIF (Tax increment financing) district, and the city’s motor fuel tax now covers what would have been a $5.4 million deficit.
City Administrator Ray Forsythe says the City will continue its 20-year infrastructure initiative which was set to begin this year.
“While it’s overall less what it was than last year, we’re still making plans to do this 10-million dollars in capital improvements because our streets need to be repaired, our utilities needed upgraded, and we’ve been saving money over the last multiple years for that,” Forsythe said.
“In an effort to accommodate potential reductions in revenue due to the COVID-19 pandemic, staff has projected no increases in revenue from the 2019-2020 budget for major revenue sources of Sales Tax, Home Rule Sales Tax and Local Use Tax which make up 63% of all General Fund revenue,” Forsythe said in a separate statement sent to WMBD.
City leaders say although they are getting into their savings, 99 percent of the City’s revenue is in reserves. The budget is a 19% decrease from last year’s $30,382,433 budget.
Mayor Gary Manier explains how the City plans to keep its budget balanced.
“$5,000,000 dollars is actually money we’ve saved up over the years. We’re moving capital projects forward. It’s not really a 5-million dollar deficit, we’re just borrowing from reserves. We’re not borrowing money and having to pay it back or anything. We’re just going into reserves, and we’re not spending down our reserves where we’re in any financial trouble,” Mayor Manier said.
“This budget is a culmination of hundreds of hours spent by Department Directors and Top Management analyzing needs and forecasting for the upcoming year. The City has taken steps over the last few years to plan for this year’s emphasis on Capital Improvements. Through a combination of savings, recent sewer and water rate increases, increased sales taxes and motor fuel taxes, the City is implementing a 20-year initiative to rebuild over 20 miles of streets and utilities. In addition, late last year, the City Council adopted Goals and many are addressed in this budget,” Forsythe said.
Finance Director, Joanie Baxter provided an overview of the Budget at the Public Hearing which was
held on Monday, April 13th via a Special City Council Meeting broadcast as a Zoom meeting. She
added, “The proposed budget includes almost $10 million in capital spending, and fund balances that have been accumulated in prior years are being used to fund over $5 million of these projects, including $3 million funded by the General Fund. Even after this planned reduction in surplus funds, the General Fund is projected to have a fund balance equal to 78% of total revenue and 99% of total non-capital expenses which is very favorable as compared to the City’s minimum standard balance policy of 25% of revenue. In addition, the City has very low debt of just over $1.1 million in annual debt service payments, making up only 4.6% of total expenses,” Baxter said.
Mayor Manier said, “This budget reflects staff’s commitment to both a conservative approach to the unknowns from the COVID-19 pandemic impact on Washington’s revenue sources, and also following through on the City Council’s commitment to spending accumulated excess reserves and proprietary funds from sales tax and utility fees towards rebuilding and maintaining streets and utilities. The City Council has always taken a conservative approach to borrowing funds for projects but rather saves funds to be used for the projects we have planned for this year, including the complete reconstruction of North Lawndale Avenue and West Holland Street.”
The City Staff starts the budget process in January and the City Council has reviewed the entire budget in groups starting on February 10 and continuing on February 17, March 2, 9 and 16.
On April 6 the Council adopted Resolution 1292 setting the Tentative Annual Budget and the Public Hearing took place on Monday, April 13.