Monday night’s city council workshop centered around one topic-fiscal year 2004 budget projections. Director of Administrative Services Linda Wiggins described the budget projections as grim.

Wiggins said the general funds revenue would go up 1.52 percent in 2004, a positive increase compared to DeKalb’s surrounding cities.

Wiggins said focusing on the general fund budget is important because it is the largest of all city funds and is the best reflection in terms of the city’s financial standing. The general budget is projected to generate $21,002,857 in revenues from more than 50 sources including restaurant/bar taxes, sales taxes and property taxes.

Restaurant and bar taxes (2 percent of the city’s generated revenues) are projected to bring in about $1.3 million. Wiggins stated sales tax as the city’s fastest growing source of revenue based on the influx of new restaurants.

Wiggins said sales tax (38 percent of the cities revenues) looks extremely grim for 2004 with a projected shortfall of 4 percent. She cited Tax Incremental Funds program transfer as the primary culprit for the sales tax decline that otherwise would have been somewhere near a 7 percent increase.

Positives in terms of projected increases in revenue are a 19 percent increase in property taxes, 10 percent increase in intergovernmental taxes and 6 percent increase in services fees.

But despite these increases, it’s the city expenditures that are paying dividends for the city. Personnel expenditures are projected to rise 10 percent in 2004. Wiggins described personnel expenditures as the largest cost center of the city with 221 full-time employees.

Two significant increases in personnel are pension costs (16 percent at $2.14 million) and the city’s health care insurance costs (29 percent at $3.4 million). Wiggins said since fiscal 2000, health and pension costs have increased almost 88 percent.

“In my opinion, health insurance has become the No. 1 domestic problem,” Wiggins said.

In terms of non-personnel expenditures, one particular number of significance is a 2004 projected increase of 34.3 percent in debt service.

Wiggins displayed the overall projections of revenues to top off at $21,002,857 with expenditures at $21,712,432, a nearly $700,000 shortfall for 2004.

Wiggins then posed the question to the seven aldermen, “What do we do now?” She said one solution is to cut employee benefits such as golf outings and Christmas gift certificates. Another option would be to increase home rule sales tax by .25 percent, which would generate an extra $700,000 yearly that, in essence, comes out to about 25 cents for every $100 purchase. A third option would be to increase restaurant and bar taxes that would increase 2 to 3 percent and generate an extra $650,000 yearly.

Other options included hiking gasoline taxes and/or parking fines from $3 to $5.

Another option, Wiggins said, would be to dip into fund balances. Fund balances, or excess surplus built up over the years, have declined steadily over the past two years, and if used, could disappear eventually.

Fourth Ward Alderman Michael Knowlton said he completely disapproved of any tax increases and wouldn’t entertain any dialogue regarding the rise in taxes.

Fifth Ward Alderman Patrick Conboy offered an old idea discussed by the council about implementing an entertainment tax on such things as Convocation Center events, movie houses and theaters. Conboy emphasized that a relationship with NIU would be essential for this to work because of the amount of entertainment taxes the city could generate from NIU students.

Wiggins concluded the FY2004 presentation by stating the city has a daunting task ahead of them, and not everyone involved would be satisfied with the direction the city may take in ridding the budget shortfall.

“It’s hard pressed to make further cuts than are already being used,” Wiggins said, “but nobody is going to be happy, and everybody is going to feel some pain.”