As Calumet City prepares for budget discussions to begin, the City Council voted Wednesday to transfer $4 million from a 2023 bond to help overcome its backlog of bills.
The city last month approved a plan to pay back the $8 million owed to vendors through a new 5-year loan that Mayor Thaddeus Jones said would prevent the city from having to cut costs further.
Jones said Friday the $4 million fund transfer will allow for some for the immediate payment of water and other bills before the loan is secured. He said the transfer is possible because city doesn’t expect to use any money from the bond fund, meant for water infrastructure projects, within the next year.
Paying vendors, including the city’s health insurance, water and garbage providers, quickly is important to prevent them from charging the city extra for late bills, Jones said. Since 2023, the city has operated in budget deficits ranging from $2.8 million to $4.7 million that led the mayor to lay off 46 people in May.
Sixth Ward Ald. Miacole Nelson provided the sole vote against the proposal, though 2nd Ward Ald. Monet Wilson said she would have also voted against it if she had been able to attend the meeting.
“How do you take money out of a bond that we’re going to have to pay back, and we are still generating bills?” Wilson said. “It’s a never-ending cycle and the taxpayers are going to have to pay for it.”
Finance Director John Kasperek previously said the city planned to secure the $8 million needed through a bond using revenues from its 1% grocery tax as collateral, if allowed by investors. Otherwise, a property tax increase would be necessary to pay the debt.
“We want to be responsible,” 4th Ward Ald. Ramonde Williams, who is also chair of the Calumet City Finance Committee, said Friday. “We don’t want to put certain pressures on our residents, but we also want them to know that we’re trying to do what we can do to make sure that things are solid.”
The city is expecting a $3.7 million surplus for the upcoming budget, preventing additional layoffs and cuts, Jones said, made possible through better enforcing tax collections from businesses.
The city instituted new taxes in August to raise revenue, including the 1% grocery tax that replaced the tax formerly collected by the state, a 1% tax on food and beverages, a 1% tax on vehicle rental and a gas tax increase from 1 to 2 cents per gallon. Water and sewer rates were also increased to pay off a bond from 2015.
“Instead of us waiting around for people to send us money, it’s almost like we have to act as collectors,” Jones said.
He said in some cases, businesses have been passing on the food and beverage tax to customers but failing to pass on the revenues to the city.
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“Now we have to do a better job, and we’ve been doing that,” he said.
Jones said discussion of the proposed budget will begin at the next city council meeting, scheduled for 6 p.m. on July 23 at City Hall, 204 Pulaski Road. The deadline to pass a budget is July 31, he said.