Rockford's Independent Newspaper

Rockford closes funding gap by $2.7M

By Jim Hagerty 

CITY HALL — Rockford’s looming $10.5 million budget deficit could soon be reduced by $2.7 million, the city’s finance director says.

According to Rockford Finance Director Carrie Eklund, the city has a surplus of cash it has on hand for unemployment and worker’s compensation expenses. That money could be transferred to the general fund of approved by aldermen.

By transferring the cash into the general fund, it will offer reprieve in things like payroll expenses, as the general fund is the pool used to pay city staff, police officer and firefighters.

“With some very hard work through HR, there has been a turnaround and some very successful years in those funds,” Eklund said of the one-time budget source.

She added that it is not a best practice to hold that money in a fund if it is not going to be used.

“On an annual basis, we review these funds to determine whether we have funding levels at, below or above where we want our targets to be,” she said. “If we don’t need the money, we should give it back.”

One of the reasons for the surplus, Eklund said, is the city’s stop-loss policy to cover in unemployment and workers compensation claims of a certain dollar amount. Without the policy, the city could experience catastrophic losses if claims were to increase.

So far, however, that hasn’t happened, she said; the city, as an employer, has a low unemployment rate.

“We don’t lose employees very often,” Eklund added. “We only paid $12,000 in claims in 2017.”

The matter passed at the committee level Monday. If the full city council approves the transfer, the new budget deficit would be reduced to an estimated at $7.8 million.

Even with the transfer in 2018, the city can’t count on it in future years. That is why Eklund said staff is considering recommendations from the citizen-led financial task force to find long-term revenue sources.

One of those options, giving the city power to prosecute low-level crimes, was also approved by the finance committee. It would allow the city to treat non-violent crimes as civil infractions.

Offenders would not be criminally prosecuted in Winnebago County Circuit Court but pay a fine to the city for offenses like disorderly conduct. In short, those offenses would be handled similar to how the city enforces parking ordinances.

In addition to helping to unclog the criminal court dockets and free up resources at the county level, the plan would generate an estimated $187,000 in revenue for the city.

The matter will be placed in front of the full city council next week. Aldermen meet as a full council on the first and third Monday of every month. Committee meetings are the second and fourth Monday. R.

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