Council debates spending options
By Hank Beckman For The Sun January 28, 2013 11:12PM
Updated: March 2, 2013 6:41AM
Naperville is looking to spend about $46 million in fiscal year 2014 on capital projects, and $289.4 million over the next five years.
The decision City Council will soon face for this year’s budget is whether to borrow money to pay for the projects or use excess revenue to pay for them. The new surpluses are the result of an improving economy bringing in more tax dollars to the city.
“In almost all cases, revenues are above what we budgeted,” Finance Director Karen DeAngelis told City Council at a budget workshop Monday.
DeAngelis stressed that while all revenues are up, particularly encouraging is that real estate transfer revenues are up 13 percent over the last year and Naperville’s share of the Illinois state income tax is up 12 percent.
Excluding utility taxes, all economic-driven tax revenues — apparel, retail and automotive taxes — are up 10 percent over the previous year.
The total budget for fiscal year 2014 is estimated to be $113.5 million in revenues against $118.1 million in expenses, a $4.6 million shortfall.
But with $8.6 million still available from fiscal year 2012 and a $1.2 million surplus from fiscal year 2013, the city is estimated to be in the black to the tune of $5.2 million for 2014.
The Council has the option of putting the extra money toward paying down its pension liability or paying for capital projects.
With about $46 million in capital projects scheduled for 2014 — and $289.4 million over the next five years — the temptation exists to get ahead of the game by using at least some of the excess cash on those items. But there is that matter of $100 million in unfunded pension liabilities to worry about.
Naperville still has a Triple A bond rating and is on track to have its pensions fully funded by 2033. Although officials say that Naperville is considerably better off than many municipalities, some feel that paying into the pension fund and borrowing money for capital spending makes sense.
City Councilman Steve Chirico asked DeAngelis to provide estimates of what using the money toward pension costs would mean for the city’s bottom line.
Councilman Paul Hinterlong agreed with Chirico, and DeAngelis said that her staff could provide some estimates.
Council member Doug Krause agreed with looking at borrowing for capital projects, reasoning that people who lived in Naperville in the future should bear some of the costs for improvements made right now. But he also suggested an alternative use for the surplus — returning it to the taxpayer.
“They’ve tightened their belts (recently),” he said, making it clear that he thought the average taxpayer should be rewarded.
One of the biggest capital expenditures planned for 2014 would be for the Water Street Development. If the project is ultimately approved by City Council, the city expenditure on it is estimated to be in the neighborhood of $4.5 million, most of which will go toward the city’s share of the 520-space parking structure planned as part of the project.
The project has been the source of much controversy in the community, with the most severe criticism being the overall density of the development and its potential adverse effect on parking and traffic in the area.
The mere mention of it prompted Hinterlong to suggest that Council would soon have to take up the issue of how much redevelopment is appropriate for downtown Naperville.
“At what point are we too saturated,” he asked.
“How much more can we take?”