There's an unfortunate disinformation campaign being waged by individuals that consists of outright false information and misrepresents the ongoing issues with the City budget.
The City of Sterling, as most municipalities in Illinois and across the nation, is facing a sharp downturn in revenues as a result of the decline in the economy since last fall. The Sterling City Council directed staff to prepare a balanced budget that avoided tax increases while focusing on the Council goals of combating gangs and crime; addressing code enforcement and neighborhood issues including housing; maintaining and improving infrastructure, particularly streets; and addressing the condition of the riverfront to encourage future development in the area.
Given the state of the economy, with the exception of the increase to the property tax levy to help offset increases to the police and fire pensions, nearly every other major revenue source to the General Fund is expected to decrease more than $230,000 for Fiscal Year 2010. Further exacerbating the problem are costs for employee health insurance that are rising at 10% (an increase of $78,750), firefighter pension costs that are rising 17% (an increase of $37,328) and police pension costs that are rising 34% (an increase of $81,328). In short, after paying for the increased pension and health insurance costs, and paying a 3% increase to employee salaries due to already negotiated and impending contracts, the City needed to tighten its belt and cut more than half a million dollars from the General Fund budget or increase taxes. The consensus was this was not a good time to consider a tax hike on Sterling residents.
Over 70% of the General Fund’s operating revenues are personnel costs, making it extremely difficult to make significant cuts without cutting personnel costs. In light of the situation, employee meetings were conducted to inform them of the budgetary issues and were solicited for ideas. Staff made cuts to line items throughout the budget, including over $600,000 in departments outside the fire department. However, the budget was still not balanced.
It was determined that the easiest, fairest and most efficient way to balance the budget after all other cuts was to freeze the annual increase to salaries, while still honoring step and merit increases to employees. In an effort to avoid layoffs, the City approached the fire union and asked them for their help in closing the budget gap by reconsidering the contractual across the board increase in pay, and taking merit increases and specialty pay increases only. Even with a 0% change to across the board pay, specialty pay and step increases would increase most firefighter pay by an average of $500, with some as high as $1,080 and one by $4,074.
The City also made the suggestion that it would welcome the idea of furloughs where all employees in the City would keep the 3% increase, but take a few shifts off over the course of the year if the fire union would consider amending the contract to make that allowable. The City expressed a willingness to listen.
If contract employees had agreed to a 0% across the board increase while the City still honored the step and specialty pay increases, we would have avoided layoffs of full time firefighters and the substation would remain open.
If contract employees had agreed to a 3% across the board increase but with some unpaid furlough days, we would have avoided layoffs of full time firefighters and the substation would remain open.
After presenting the City’s difficult financial outlook, and asking for the fire union to help us given these unusual times and bad economy, the City was told that the union would get back to them. The City has not heard a response back from the union and thus, the City has to honor the contract and provide a 3% increase in addition to the step and specialty increases to the firefighters. The City was then left with the option to raise taxes or eliminate positions in the City. The City felt this was an extremely bad time to raise Sterling resident’s taxes, and had no alternative but to eliminate positions. The City cannot continue to sustain it's current spending levels in a down economic environment and since the general fund budget sis 70% personnel, there is little choice to do anything other than adjust the number of personnel in public works, code enforcement, police or fire.
Any cut in employees leads to a cut in services, the question is which cut minimizes the effect on citizens day-to0day services and prepares us for long view.
