By Jim Hagerty
CITY HALL — Revenue coming into the coffers are being outpaced by expenses, according to City of Rockford Finance Director Carrie Eklund.
The result? A $10 million budget deficit.
Aldermen were facing a spending hole of $8 million, but the lack of cash coming into Rockford’s general fund is telling a slightly more dismal picture.
The city operates on a number of funds, actually. They are the General Fund, the city’s chief operating fund; Special Revenue Fund, use for TIF, motor fuel tax, and community development; Enterprise Fund, which represents revenues collected for city water services and parking; Internal Service Fund; which accounts for goods and services between departments on a cost reimbursement basis; and the Fiduciary Fund, cash used to support a variety of city programs such as pensions.
“The conversation today is about our General Fund,” Eklund said Monday. “We have no concerns with the other funds.”
As of Monday, General Fund debt projections for 2018 are $139.2 million, 47 percent of which are salaries. Benefits make up 27 percent. The rest are capital, supplies, contracts and miscellaneous expenses.
Personnel, according to the overall budget, costs the city about $250 million a year.
Typically, the city relies on various offsets, like sales taxes, to even the bottom line. However, as Rockford is still feeling the crunch of the banking crash of 2008-09, those funds are only growing by a percent or two each year. Employee costs are rising by 3 percent.
In response, the city has taken measures it would rather not have taken, such as dipping into the sanitation fund to the tune of $2 million for demolition, something Eklund said cannot happen moving forward because there’s no more money.
The State of Illinois isn’t paying its bills on time either, prompting officials to be somewhat conservative in their projections moving into the new year.
“We know what the world looks like for 2018,” Eklund said, noting that Illinois is now charging hefty administrative fees on top of its collection of local sales tax.
“That’s a reduction that’s being felt significantly in the CIP funds,” Eklund said.
A 6-percent increase in the pension fund contribution will be part of next year’s expenses.
The city has responded with staff cuts, mostly to the community development and public works departments, trimming them to 141 employees. Leaders say they are doing what they can to avoid what’s being felt in the county, where dozens of deputies have been let go in what the sheriff has called a grave threat to public safety.
Collectively, Rockford’s police and fire departments are already 2 percent smaller than they were a decade ago.
The aim, officials say, is to avoid deepening those cuts without tax increases, something Mayor Tom McNamara’s Financial Task Force is moving toward.
The city is also attempting to close the budget gap by way of property taxes, however, the outlook of the Rockford real estate market is not positive as what is being reported. Sales are up, but Rockford real estate values are still hovering around what they plummeted to back 2008. In other words, homes are still being sold for pennies-on-the-dollar, many of them foreclosures, REOs and short sales, all of which positively affect sales numbers.
As a non-home rule city, Rockford is capped in the amount it can levy from property owners.
The Financial Task Force is expected to present its recommendations to council at the end of November. The full City Council meets on the first and third Monday of every month. Committee meetings are the second and fourth Monday. R.