STERLING – The city's budget is still a work in progress, but the first draft has city officials hopeful about developing a balanced version before a public hearing on April 21.
"We should be within $10,000, if we don't balance," City Manager Scott Shumard said.
In the working draft, the general fund shows revenue of $10,478,491 and expenses of $10,560,692, resulting in a projected deficit of $82,201.
The early draft has several moving parts, however. It includes more than the minimum contribution to the capital fund and a cushion for health insurance contributions.
Part of the projected deficit already has been closed, Shumard said, because "the health insurance numbers just came in, and those are better than expected."
Another big variable is expiring labor contracts with both the fire and police departments. The police union contract expired April 30, 2013. Negotiations broke down early in the process, and a federal arbitrator is scheduled to come in May 14. Because those are public safety jobs, the existing contract is automatically extended until a new agreement is reached.
The fire union pact will expire April 30. The first negotiating meeting was Feb. 13, with no others scheduled. Police and fire contracts have been renegotiated every 3 years.
Personnel costs make up a majority of the general fund, and the uncertainty created by the police and fire labor situation is substantial.
"That's one-third of our full-time staff with contract question marks," Shumard said.
Then there is the domino effect created by a change in wages. Higher wages means increased contributions for Social Security, pensions and workers' compensation insurance.
Since 2008, police wages have increased 11 percent, and fire is up 10.25 percent, plus incentives for EMT and other certifications, Shumard said.
Projected police pension costs for 2014-15 are $628,847, compared to $601,394 in 2013-2014. Fire pension contributions are projected at $609,446, compared to $499,578 in the last budget.
"The fire department was hit with a large number of retirements," Shumard said. "That also played into the overtime situation."
The amended budget from 2013-2014 shows that the fire department's overtime went more than $175,000 over projections.
The last budget period saw a perfect storm for overtime develop, Twin City Joint Fire Command Gary Cook said.
"We had retirements, injuries, and illness in that budget – it was highly unusual," Cook said. "There was one captain on disability, one captain on nonduty injury, a firefighter injured on duty, and two retirements."
Cook doesn't anticipate a repeat of that scenario.
"We are projecting one to three retirements in the next budget period," Cook said. "We are working one short now and testing for our waiting list on April 19."
Applications are being accepted for the fire department tests. Applications are available at City Hall or at ci.sterling.il.us. A mandatory orientation session will be on April 14.
The budget will be put on display April 7 at City Hall.
Big budget challenges
Some of the challenges the city of Sterling faces to balancing its fiscal year 2014-15 budget:
• Declining assessed valuation for downstate Illinois means less property tax revenue. Whiteside County expects a 2.18 percent decline in Sterling's EAV for 2014-15.
• Slowing sales tax growth: Projections up only 1.1 percent in 2013-14 and 2014-15 budgets
• Expired and expiring union labor contracts
• Rising pension costs