Danville council to examine options on budget cuts

DANVILLE — Three years ago, the city cut 24 positions from its payroll, and next year could be a repeat of those cost-saving measures.

Mayor Scott Eisenhauer said he has "no idea how many" positions could be cut from the city's roster of 254 full-time employees, but he believes personnel cuts are necessary in light of the city's declining equalized assessed valuation, which means the city might have to commit as much as $1.5 million in other revenues, such as state and local sales taxes, to pay costs normally covered by its property tax revenue.

"I don't know how you cut $1.5 million out of the (general fund) budget and not affect personnel when it's 70 percent of your costs," he said.

The city council is participating in a special study session meeting at 6 p.m. Tuesday at the municipal building, 17 W. Main St., Danville, to discuss the levy and possible cuts in personnel and services.

According to Vermilion County Supervisor of Assessments Matt Long, the EAV will go down again in the three townships that comprise the city of Danville. He said the EAV in Danville Township may decline 13 percent, Blount and Newell townships 5 to 6 percent. Overall, Long said he expects the city's EAV to decline around 9 percent. Last year, the city dealt with a 6 percent decrease.

The city is beginning its tax levy process for next year, and Eisenhauer said the city expected another decrease in the EAV, but was anticipating it would be another 6 percent decrease, so the 9 percent prediction was an unwelcome surprise.

If the EAV decreases and the city maintains its property tax rate at the current $1.97 per $100 of assessed valuation, it means less property tax revenue for the city. But the city's expenses paid by the levy continue to increase. Those expenses are police and fire pensions, other city employee benefits, bond and interest payments owed by the city and funding for the Danville Public Library.

The EAV has decreased the last two years as well, and the city has drawn on other revenue sources to pay those costs. Last year, the city pulled $825,000 out of the general fund, sewer and solid waste funds, and capital funds to cover those expenses historically covered by the property tax levy.

Assuming a 9 percent decline in the EAV, the city will need to pull money from other revenue sources again, and city officials have predicted it will need to take $1.5 million out of the general fund and about $356,000 out of other funds, including sewer, solid waste and capital funds.

Eisenhauer would not speculate on how many personnel cuts would be necessary or from where the cuts would come.

In 2009, the cuts were across the board in fire, police, public works, inspections and other areas.

Alderman Steve Nichols said the fact that additional revenues, besides property tax, have flowed into the city this fiscal year should be considered at Tuesday's study session in considering any cuts. Nichols also said other revenue should be generated in the future from economic development going on in the city.

Comptroller Gayle Lewis said the city's other revenue sources are currently more than $400,000 above what was budgeted for the current fiscal year.

Eisenhauer said he doesn't want to get into the habit of budgeting on projected revenue. He said the city establishes the budget each year based on what revenue was generated the previous year. He said there are projected revenue numbers for the development that's going on right now, which includes Kohl's and Meijer stores. But Eisenhauer said the city really has no definite idea what will be generated.

"So why am I going to project 'X' amount of money when I don't know what's going to happen?" he said.

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