City staff offer capital budget presentation; mayor: We are setting the table for later discussion

By Dee Longfellow

    On Monday, May 13, following regular Committee meetings, the City Council met as Committee of the Whole (COW) to hear a capital budget overview provided by City Manager James Grabowski and his staff.

    Mayor Scott Levin began the meeting, explaining that this kind of presentation had never been done before quite like this. He thought it would especially be informative for the newer aldermen, since there are a number of projects that have capital budget implications.

    “It is intended to be educational so we all know what the capital budget is, what it does, how it works, the role of staff, the role of the Council, etc.,” Levin said. “I do not want to get into specific priorities, such as the train station versus the police station versus lead pipe removal.

    “We are setting the table to have discussion later.”

    Grabowski began the overview with the Capital Expenditure Budget (CEB), which is “a long-term financial planning tool to identify and plan for City projects.”

    “It is a planning tool, it is NOT the annual budget,” Grabowski pointed out. “That is the operating budget and not all projects in CEB are put into the operating budget every year.”

    The CEB includes: “projects and expenditures of $25,000 or more that results in the acquisition or construction of fixed assets intended to be held or used for a period of ten years or more.”

    Expenditures in the five-year CEB areas include:

• street and sidewalk programs

• municipal utility (water and sewer)

• stormwater

• buildings

• major equipment

• other (vehicles, software, electrical, etc.)

Enterprise Funds

According to the Plan, Enterprise Funds are “in their own business or subsidiary” of the City, that is, they are meant to sustain themselves and to recover the cost of their own capital projects by providing a service which is funded by user rates and charges. These include the Municipal Utility Fund (MUF) and the Parking Fund, which together cover 95% of the total Enterprise Fund.

    A total of $46.2 million was budgeted in the MUF for capital projects in 2024, the largest of which was the wastewater utility plant. The MUF also includes $4.7 million budgeted for debt service in 2024, which is primarily for IEPA loans obtained for various projects.

    The Parking Fund has a budget of $70,000 for the City’s parking lots and decks. There is a fund transfer from the Capital Improvement Fund of $1.2 million for debt service, primarily for the Addison St. parking deck, which is $900,000 annually.

    The City is currently considering the use of TIF 6 Funds to perform parking deck repairs and to install charging stations for electric vehicles.

Governmental Capital Funds

    These are funds meant to recover the cost of capital projects through tax revenue, whether generated locally or passed through the state or federal government. Some are unrestricted, meaning the City can use the revenue to support any type of capital project. Restricted funds are either based on state statute, meaning the state has specifications on how the funds are used, or by the City itself, following its own “agreements,” to use those funds in a particular way.

    The City’s General Fund and Capital Improvement Fund work together to fund the City’s many programs and, while the General Fund does provide some funding toward capital projects, its primary focus is the daily operations of the City.

    Governmental Capital Funds include:

• Capital Improvement Fund

• General Fund

• Motor Fuel Tax

• Tax Increment Financing (TIF) Fund

• Restricted Funds (explained above).

    Toward the end of the presentation, there was a pie chart, showing the City’s 2024 CEB five-year total revenue sources by fund.

    They include:

MUF – $45,732,048 (15%)

Federal/state grants – $42,796,768 (14%)

CIF – $40,978,795 (14%)

General Fund – $25,628,325 (9%)

TIF – $14,321,316 (5%)

Stormwater Fund – $11,655,200 (4%)

MFT – $4,867,900 (2%)

Parking System – $2,154,800 (1%)

Other – $4,364,025 (1%)

    The entire presentation of the Capital Budget Overview can be found at the City’s web site.