AP NEWS

Pension funds dominate attention in city budget

April 22, 2019 GMT

STERLING – More than half of the property taxes collected for the city will be directed toward police and fire pensions under the new 2019-20 budget taking effect May 1.

The city passed a new budget Monday totaling $42.6 million. General fund revenues are projected at $13,435,336, and expenses at $13,365,426, leaving a surplus of $69,910.

The pension funds are a growing concern for many cities, but Sterling officials have shown some foresight – they have been putting away money toward those expenses for a few years.

In recent budget discussions, City Manager Scott Shumard told council members that Illinois legislators set the benefits and the rules on pensions and cities are left to fund those costs via property taxes. He added Sterling contributions to those funds continue rising faster that revenue growth because city officials know that if less is put in each year, more must be contributed in later years to fully fund the pensions.

Sterling currently has about 50 percent of those two areas funded and will contribute about $3 million total to police and fire pension costs in next year’s budget. The budget includes a request of $1,445,644 to fund the police pension. That is $189,131 less than what was put into the fund, according to last year’s amended budget. For the fire pension fund, $1,635,792 was requested in the new budget, an increase of $47,824 over last year’s final budget.

The challenge is not going away anytime soon, either, as Shumard told the council state legislators do not seem to want to reform pension rules anytime soon.

As for revenues outside of property taxes, Shumard projects sales tax to increase about 4.5 percent and sales tax in areas such as video gambling to go up by 6.7 percent.

Some of the expenses in the budget for the new fiscal year include the purchase of a new fire truck for about $650,000. Some of that cost will come from the capital fund and the balance from the general fund.

Also, Phase 1 of the expansion of the public works building will begin in the new city year. Work will incude an addition to the new building along with roof repairs. Total cost is estimated at $140,000.

Shumard also highlighted other projects where money was allocated, including lighting and security on the riverfront and upgrades to Central Park and the Grandon Civic Center. Depending on funds available, areas to be addressed here include new plumbing, electrical and lighting and a new bathroom/concession building.

A key issue in the recent election was sidewalk and street repair and there is $1.2 million included in the budget for road repair, Shumard said.

As for stormwater projects expenses slated for the next year, crews will concentrate on a few areas including finishing Dillon Avenue Phase 1 from 11th to LeFevre. Also, the city will finish work in the Douglas Park area including Douglas Drive, Chestnut Avenue, Harvey Drive and Woodside Drive.

Work also is scheduled for Miller/Second Avenue, West Sixth Street south of Kidd Field, East 13th Street and Johnson Avenue. The city also hopes to do construction on the detention pond behind the Northland Mall if the state approves the project. Total amount for all of the stormwater work in the next budget year is nearly $7 million.

Another chunk out of the budget for next year is continuing the city’s plan of putting money away in a fund for the future replacment of the sewage treatment plant. Shumard has set aside $625,000 from next year’s budget to be added to that fund, $25,000 less than last year, which will push it over $6 million. Current estimates for a new plant are $35 million.