It’s one thing to have a to-do list. Having the resources and critical support for transferring task to reality is another.
Naperville City Council members are casting a cautious eye on staff proposals for major public projects over the next several years. A workshop Monday evening showed council members are reluctant to commit to new debt, weighing in for stretching the timeline for numerous capital investments as a way to minimize borrowing.
Stretching more than four hours, the third of four working sessions originally scheduled to focus on aspects of the 2015 municipal budget spotlighted the five-year capital improvement plan, and each of the city’s major departments has a vision. The conversation is being expanded to include at least one additional workshop.
The multi-year spending blueprint is considered a long-term investment in the city, Finance Director Karen DeAngelis noted. A total of $311 million in capital projects is on the table, which represents an increase of more than 14 percent over what was pictured two years ago, but the sum remains far below the $429 million five-year capital investments projected in fiscal 2006 and 2008.
The city’s overall economic outlook has improved significantly, DeAngelis reported. Numbers coming in for the current budget, which covers spending and income through April 30, show the sides are likely to balance by then, nullifying earlier forecasts of a shortfall.
“We’ve got improvements in revenue of $3.3 million, and improvements in expenditure of $1.1 million,” she said.
Sales tax income is up 9 percent from last year, DeAngelis said, and real estate tax transfer tax receipts also have gone up by 16 percent.
“If you look at the number of homes sold — I love this stat — we’re 65 percent above where we were two years ago,” she said.
Some of the planned investments are likely to proceed as proposed. Officials have agreed to devote significant funds to maintaining and improving city streets. Plans call for expending $11.6 million for the purpose annually from fiscal 2015 through 2019; residents have identified better traffic flow as their number-one priority for the council’s focus.
Plans also include a new centralized traffic management program that will electronically adjust and synchronize traffic lights on the entire 8½-mile length of Washington Street, from Royce Road to Warrenville Road, using real-time traffic data. DeAngelis said 80 percent of the project cost is expected to be covered by federal grant money. However, design costs are not covered by those funds, and the city’s share would include $1.25 million in 2015 and $1.44 million in 2016.
Council member Paul Hinterlong urged putting that project on a fast track.
“When you go knocking on doors while campaigning, the number one concern is traffic,” he said. “This is an opportunity to do something about it ... let’s roll.”
Officials are concerned that large pieces of the five-year plan do not so far have comprehensive funding mechanisms identified. Among those are the city’s $6.2 million in planned contributions to the hotel/retail development and public parking deck on Water Street, and the overhaul of the central parking facility on Chicago Avenue, pegged at $5.2 million, although revenue from the tax increment financing district and the city’s parking fund is expected to offset a portion of those costs.
The two projects will be staggered, with the downtown parking deck work beginning after the Water Street deck is completed, roughly a year from now, officials said.
“When we do the (the downtown deck), we will lose 550 parking spaces,” said Bill Novack, head of Transportation, Engineering and Development.
Councilman Grant Wehrli didn’t see any need to hurry, and said he would not support taking on new debt to redo the downtown deck right away.
“This council is not looking at borrowing a lot of money this year,” he said.
While upgrades for the city-run water utility are covered by that department’s income, the electric utility shows $7 million in needed expenditures that remain unfunded.
“Given their cash position, they have proposed a much lower spend for next year,” DeAngelis said.
The Electric Department is looking at $7.5 million worth of development, improvement, replacement and relocation expense, nearly 90 percent of it unfunded at this point.
Spotlight on electric
Customers of the electric utility are on track for their bills to rise. The city’s 2010 rate study sharply underestimated the projected five-year cost of power, resulting in fee levels that drained the required $11.2 million reserve as it created a $14 million “negative cash flow” scenario, according to a staff memo.
The shortfall is blamed on an array of factors, including decreases in the price of natural gas; construction cost overruns at the Prairie State Coal Plant, a 1,600-megawatt, electrical power station and coal mine southeast of St. Louis, of which Naperville holds 15 percent ownership; unusual weather patterns; and peak usage, which drives up the price of energy purchased by the city.
Officials say the shift to a smart grid is unrelated to the funding shortfall they’re looking at now. They note that the city joined the Illinois Municipal Electric Agency in 2007 and began receiving power through the agreement three years ago, under an arrangement that extends until 2035, and they anticipate costs will come down and stabilize as the membership continues.
Wehrli noted that the city recently spent about $22 million on the smart grid upgrade, covering half of the cost with federal grant funds, and he has no inclination to spend more on the utility’s IT needs right away.
“We already have one of the most technologically advanced electric infrastructures in the nation, correct?” he said. “And yet you still want to spend money on it. You kind of lost me there.”
Electric utility director Mark Curran said some of some of service reliability concerns are more urgent than others, noting that residents in the Maplebrook area experienced frequent power outages in the 1990s, after the city “waited too long” to address upgrade needs.
“You don’t want to get to the point where it’s totally failed,” he said.
Proposals in other departments include the information technology area. City Clerk Pam LaFeber said “antiquated” fingerprinting and parking-citation systems, which run using parts that no longer are available, are in need of replacement for the Police Department. Downtown surveillance equipment needs to be updated as well, she said.
“The computer forensics lab will also be redesigned,” she said.
In addition, a remote data center will be relocated in a place other than in the cloud, as an added layer of protection against the sort of hacking that took the city’s electronic communications down for several weeks in the fall of 2012. The backup center, which LaFeber said is “now standard IT business,” would be located in a Northern Illinois University site in Sycamore and would be a supplement to the Internet service provision the city already receives through NIU.
“In the event of a compromise, having a remote location will reduce down time,” LaFeber said.
Agreeing it would be premature to act until they have a deeper understanding of the needs involved, council members scheduled an additional workshop for Feb. 24, intended to focus directly on the needs of the electric utility. The council also will look at adjusting the mayor’s compensation at that session next month, considering changes that would take effect after the 2015 election.
“Historically — though not in the last couple of years — CIP is a big deal,” City Manager Doug Krieger said. “The book contains $300 million-plus dollars of projects. It certainly wouldn’t be unusual for it to span more than a single workshop.”
Fund balance options will be on the table at a March 10 workshop. The council this year voted to allocate $6 million in surplus budget revenue to spending down the deficit in the city’s public safety pension funds.
“We’ll know more at that point as to what we actually have in a fund balance, so council can actually make a recommendation and give direction on how it should be presented in the budget, because right now I still only have estimates,” DeAngelis said. “I only have roughly a $200,000 figure to have for you to think about. When we get to March, I will have more up-to-date information, and hopefully the number will be larger. It’ll be a more exciting conversation about what to do with it.”