CHAMPAIGN — After spending years trying to reduce costs and waiting for revenues to stabilize, officials say the city's bleak budget picture could be starting to turn itself around.
City officials proposed a $71.6 million operating budget to council members Tuesday night after budgeters cut $350,000 more in recurring costs. They said that's a nominal figure compared with the $17.7 million in adjustments they've made over the past few years.
"This is comparatively a good year," said Finance Director Richard Schnuer.
The city council will need to approve the next fiscal year's operating budget in June, and it will spend the next few weeks examining administrators' proposal before casting a final vote. The budget year starts July 1.
A 13.1-MB, 309-page pdf copy of the budget as proposed is on the city's website .
Schnuer expects the city's biggest source of revenue, sales tax, will make a 2.2 percent jump by the end of the current fiscal year and another 2.8 percent increase in the next budget year. Property-tax revenue will remain flat — although the rate itself increased after property values dipped — and the recurring income-tax receipts that the state shares with the city are expected to rise 3 percent.
While this year's budget cuts — mostly a reclassification of city jobs and leaving some open positions vacant — are negligible in comparison to previous years', "it does not mean a return to the years when development revenues would outdo our expectations," Schnuer said.
Budgeters were able to make $2.5 million in one-time allocations after unexpected savings will carry some money from this fiscal year into the next. Capital improvements — like road, sewers and library upgrades — will get a $1 million bump after officials spent years borrowing from the fund to pay for general operating expenses.
One of the city's biggest capital projects during the next fiscal year will be making plans for $4.7 million worth of improvements to Market Street, although the upgrades themselves are not likely to happen until the 2013-14 fiscal year, said City Manager Steve Carter.
Officials are also planning on upgrading the segments of Windsor Road that approach the bridge over Interstate 57. The $2.8 million project is made possible by the 4-cent-per-gallon gasoline tax, which became effective Tuesday, and likely will include the addition of sidewalks and bicycle lanes.
The unexpected carryover will also help budgeters save $400,000 for an anticipated need to replace the radios that public-safety officials use.
The $2.5 million in one-time allocations does not necessarily mean the city's budget has resumed its growth — there's no guarantee that kind of money will be available again next year. Carter said that, while it's apparent that the economy is starting to rebound, officials know they will have to adjust to a "new normal."
The city has eliminated 34 positions in the past four years and left six more unfunded. Millions of dollars have been chopped from the budget along the way.
Schnuer said the focus throughout the past several years' budget contraction has been on the long term. City officials know they and residents will need to live with the cuts for a while.
"We realize the turnaround isn't going to come all at one time," Schnuer said. "It'll be a slow process."