Projected DeKalb revenue for fiscal 1988 will exceed the city’s projected expenditures by an estimated $68,000, City Manager Mark Stevens said.

Stevens reported DeKalb’s fiscal 1988 city budget status, assumptions and priority issues for the city’s budget in fiscal 1989 at a special meeting of the city council on Monday night.

Both revenues and expenditures were overbudgeted for fiscal 1988, Stevens said. Expenditures went over expected costs because of overtime payroll (for snow removal and flood work) and in health insurance, while revenue ran over primarily because of sales tax, he said.

Sales taxes constituted 40 percent of DeKalb’s revenue, Stevens said. The growth in retail sales is good news, but “the bad news is, it’s our (DeKalb’s) only place of growth,” he said.

While the sales tax revenue is a positive result, it is dominating DeKalb’s revenue, which the city has always tried to keep diversified, Stevens said. The city should not become too dependent on any one source of income, he said.

DeKalb Mayor Greg Sparrow said the problem with the reliability of the sales dollar is NIU’s image of a “suitcase school. Retail dollars go home on weekends,” he said.

In preparing fiscal 1989’s budget, Stevens listed preliminary budget assumptions. He said the city could assume a four to five percent inflation, no new taxes or tax increases on either the state or local level, no new fees and minimal increases on current city fees.

Stevens said during the next budget year the city does not expect any major one-time sources of General Fund revenue, any major state or federal legislative impacts, any major increases in insurance costs, no substantive reductions in current service levels, no significant service expansions, service improvements or new services—unless mandated by law or any major utility rate increases.

The city might even see a decrease in utility taxes, because Northern Illinois Gas has already reduced its rates, Stevens said. Any utlity tax decrease will affect tax revenues, he said.

On the preliminary assumptions, the city can assume a minimal change in interest rates, a four percent increase in state distributive revenues, fair and reasonable wage increases to all city employees, a state restriction or cap on Tax Increment Financing, an increased General Fund investment in capital improvements and a fair to good development year, Stevens said.

The developmental aspect actually leans toward a “good” year because of Wurlitzer subdivision projects and “other projects in the works,” he said.

“With these assumptions, I have the budget balanced,” Stevens said. However, one of the assumptions on the list already has been proven wrong.

A recent city study showed the cost of health insurance might have a 25 percent cost increase because of increasing claims and medical costs—which is raising the insurance cost substantially, Stevens said. The city has tried to contain the insurance usage by a mandatory “second opinion” rule, he said.

Stevens also made a list of city council fiscal 1989 budget priorities. He said priorities were in additional funding for street improvements, storm water project funding, a balanced budget, hiring additional personnel, a new comprehensive plan/comprehensive development ordinance, economic development, no tax increase, mass transit projects, downtown improvements and complete TIF projects.

The last issue Stevens raised was about potential uses of the new budget’s operating reserve. He said the city could afford to spend about $300,000 of the $800,000 in reserve funds for one-time projects.

He said the reserve could be used to fund the replacement of the city’s civil defense sirens, which he said are “unreliable.” The three sirens would each cost $25,000 to be replaced, Stevens said.