It is appropriate that a proposed funding should be in the annual operating budget, but it is also appropriate that certain provisos be considered.
Short-term assets of five years or less depreciation/replacement should be funded via departmental budgets. This includes assets like police cars, staff cars, and other vehicles to be replaced within the five-year time frame.
Long-term financing of public assets should be handled in two ways. Current practices should continue wherever possible; e.g.,
- TIF has financed all major building replacements; included were Fire and CUSD 200 equipment components, plus park and library building projects.
- Water/Sewer enterprise funds pay for their own asset investment, repair, maintenance and replacement
- Future eplacement of major buildings will be handled by the next generation via then available means; most likely bonds, revenue bonds, etc.
Long-term funding of CIP during periods of financial stress should be deferred in an appropriate manner; should a crisis state exist requiring immediate attention, intermediate or long term debt should be incurred and retired early when possible
Current Situation
We are now in one of those periods of financial stress. The city desires to implement the preferred policy base outlined above without making exception for economic stress periods. The city has weathered the recession so far by deferring some expenses and suspending others. However, the long-term asset maintenance project list is growing more critical. The city proposal imposes new taxes and reduces cultural programming to immediately fund implementation of the CIP plan.
Our Proposed Solution
1 . Adjust the priority ranking for all CIP proposed expenditures
2. Project the annual cost for each ranked expense by priority ranking
3. Identify budget resources for each priority ranking
4. Determine which projects can be funded in the current fiscal year
5. Defer unfunded projects to next priority ranking; fund as available
6 . When economic conditions improve, fund CIP as fully as possible
7. Crisis funding should be avoided, but must be handled on a case by case basis
8. Modest utility taxes of $400,000 to $500,000 should be levied in early years
9. TAC grant programs should be retained with Hotel/Motel Tax funding of $200,000 annually
10. Hotel/Motel Tax Fund should be analyzed and used for the following ends:
- Invest in programs designed to boost hotel occupancy; include tourism, arts, public events, community image, etc.
- Employ professional management to support event management, program invention, evolution; objective is to build self-sustaining operation that creates more municipal revenue than is spent to create it; Hotel/Motel Tax Fund remains the revenue stream to make this happen.
- Enhanced municipal revenues used to fund CIP program fully.
Conclusion
We are fortunate to live in a community that has had relatively few financial crises and at the same time has been able to afford to build a unique personality and soul.
Now in this hour of financial duress, we must not sacrifice what we have been creating. While we may have to compromise, we should take care that, in so doing, we do not sabotage the vision that has made Warrenville a very unique place to live and work.
