A $600,000 surplus is forecast for Waukegan’s city budget for the fiscal year that started May 1, marking the first time in at least 33 years the city has the opportunity to approve a spending plan with money projected to be left over.
Planning to spend $11 million less than a year ago, the city is projecting expenses of $281.7 million with anticipated revenue from all sources, including property taxes of $282.3 million, yielding a $600,000 surplus.
“We set the tone early, toeing the line with no more than a 2% increase from last year to this year,” Mayor Sam Cunningham said. “We have a good idea of the projects we want to complete. Compared to years past, we believe this helped us.”
The City Council’s Finance and Purchasing Committee gave the budget a unanimous recommendation to the full council on Monday at City Hall, setting the stage for a public hearing and possible approval on June 1.
Both Cunningham and David Motley, the city’s public relations director and a 33-year city employee, said they remember budgets using cash reserves to cover a deficit, but not a year with an anticipated surplus.
Finance Director Juan Garcia, who presented the budget to the committee, said after the meeting he looked at historic trends and other indicators to craft a spending plan for the coming fiscal year.
“We reviewed each line item,” Garcia said. “We asked each (department head) about the expenditures.”
Garcia said he realizes costs are currently increasing at an inflationary rate, meaning the city will pay more for things like gasoline for its vehicles. The city will also receive more money from its share of the motor fuel tax collected by the state, with a portion disbursed to municipalities.
“The increased cost of gasoline will be added to the city’s revenue from the state,” Garcia said. “Unfortunately, it will be coming at the expense of the residents.”
Cunningham said during the budget process, the head of each department was asked to make projections as close to actual “as humanly possible.” He remembers situations in past administrations when he was a council member, where there were budget difficulties.
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With his Rebuild Waukegan program a high priority, Cunningham said he is looking at potential sources of revenue to help fund the projects.
“On Rebuild Waukegan, we must prepare ourselves for more revenue from all of our revenue streams,” he said.
Nearly half of the budget — $134.7 million — is devoted to salaries and benefits for the city’s employees, including police, fire, public works and other services, according to the proposed budget. Contractual services like engineering, utilities, telephones and more will cost $77.4 million.
Capital improvements like road, sidewalk and alley resurfacing and repaving, as well as city vehicles, bridges, culverts and vehicle acquisition, account for $62.8 million, according to the budget.
Less than half of the city’s revenue — $116 million — comes from taxes, including property tax, sales tax and the city’s share of the state’s income tax, according to the budget. Property taxes are estimated at $34.6 million. Cunningham said real estate taxes have not been raised in six years.
The City Council is scheduled to vote on the budget when it meets at 7 p.m. on June 1 at City Hall. The public hearing on the budget will take place during the Finance and Purchasing Committee meeting before the full council meets. The precise time is not yet scheduled.