The Springfield City Council heard a presentation on the current state of its finances from William McCarty tonight. McCarty is the Director of the Office of Budget and Management and had worrying, but not unexpected, news. Revenue decreases as well as expense increases have put strain on the city’s finances.
Tax revenue for the city has been flat or declining for several years. The rise of e-commerce has been a drain on local sales tax, which is one of the main revenue sources for the city. It is only partly true that online purchases pay zero sales tax. Most major online retailers do collect some sales tax. The problem for Springfield is that money rarely makes it back to the city.
Sales tax money is allocated based on where a transaction takes place. If the online retailer has a distribution hub in the state of Illinois, that city gets all of the sales tax. If they are outside the state, then the State itself collects the sales tax as a “use tax.” That money is redistributed back to the cities, but only on a per-capita basis. This deprives the city of much of what it could be receiving if the purchases were made locally.
The state is also sharing less money from the state income tax. Compared with FY 2015, the city is getting five percent less, or over $600,000 in lost revenue.
At the same time revenues are declining, city expenses are rising. The primary driver of expenses are the police and fire pensions. These rates are set at the state level, and cannot be controlled by the city. That is why they are growing much faster than other areas of the city budget.
For the last several years, the city has cut other expenses substantially. While this has been effective at controlling costs so far, virtually all of the easy cuts have been made. McCarty said that the only areas where significant savings can be made are in public works, police, and fire. The council has worked hard to spare these departments from cuts in the past, but now they represent the vast majority of the city’s budget.
The current situation
The result of rising costs and lower revenue is a structural imbalance. In FY 2018, the Fund Balance saw a 17.2 percent decline. There have not been any negative cash balance days so far, but McCarty warned it was only a matter of when, not if, those days would come. Either cuts are going to need to be made in the public works, police, and fire, or there will need to be more tax revenue.
Although the current situation is not good, there is hope on the horizon. A case making its way to the US Supreme Court may make it easier for states to collect online sales taxes. If this case ends up with a favorable for South Dakota, Illinois could pass a similar law to South Dakota’s and bring back some of the lost revenue.
The city also voted to invest $250,000 in the new Land of Lincoln Economic Development Corporation (EDC). The EDC is a county-wide public/private partnership designed to help recruit new businesses to the county. Most of the large employers in the area have already pledged their support for the EDC.
Overall, the council was very supportive of the EDC. Mayor Langfelder said that the Q5 initiative had run its course, and now it was time for something new. Alderman Hanauer pointed out it had been quite some time since a new business had been successfully recruited to the area, and looked forward to the EDC taking a more active role in that capacity.
Alderman McMenamin was the lone dissenting vote. In pervious meetings he has cited the city’s lack of money for any project, and said the city should focus on municipal services and leave economic development to private businesses. Hy Bunn, who chairs the EDC, responded saying that the best practice for economic development requires a public private partnership.
Checks vs procards and animal control vs coyotes at City Council
The Springfield City Council covered a wide range of topics at last night’s meeting. At the request of Alderman Hanauer, Budget Director Bill McCarty gave a presentation on the use of procurement cards by city employees. Also known as procards, these cards are analogous to credit or debit cards for the city. According to McCarty, procards are much cheaper and faster for the city than checks. The savings from just the removal of physical checks runs in the tens of thousands of dollars, not including the time savings.
Despite these savings, some of the aldermen had concerns about how the cards were being used. Hanauer discussed the purchase of computers that he felt was not following best practice. He also asked why there were not more master contracts for repeat purchases. Alderman Redpath echoed these sentiments, and said that the spending was a concern.
McCarty answered by saying that the issue was with individuals, rather than the payment tool. Money is tight for the city, and it is up to supervisors and directors to make sure that spending is done appropriately. New accountability tools make oversight easier with procards, including a requirement for justifying non-local purchases. On the computer question specifically, McCarty said he defers to the subject matter experts when it comes to task-specific purchases.
Rezoning for a tavern
One request in the zoning agenda sparked a serious debate about the role of city government in regulating the local economy. The owners of Famous Liquors wanted to rezone their property for a different type of business. This change would allow them to open a tavern in the same location, which would in turn allow them to add video gaming. Video gaming is typically quite profitable, but only some types of businesses are allowed to operate gaming machines.
Alderman McMenamin voiced concerns about expanding video gaming further in the Wabash area. He noted that Springfield already has the highest density of video gaming of any city in Illinois, and worried about the impact adding another location would have on other businesses. Famous Liquors countered, saying they only wanted the right to compete on an even playing field, and the city had no right to pick winners and losers this way.
After a lengthy debate, the council eventually sided with the store and approved the rezoning 7-1-1; with McMenamin voting against and Fulgenzi voting present.
The coyote issue
Several Aldermen brought up the recent coyote sightings in the city. Despite being smaller than wolves and even some dog breeds, coyotes are still dangerous predators. As the city expands, the aldermen wanted to know what animal control can do about them.
Unfortunately, because coyotes are true wild animals, the answer is not much. Animal control is designed to handle stray pets and smaller animals. This is frustrating for residents, because finding someone who can deal with a coyote is often a challenge. The Council discussed strategies animal control could adopt and partnerships with the Department of Natural Resources to better handle this situation in the future.
The Lincoln Interment Books
The lawyers are still working out the final agreement between Oak Ridge Cemetery and the Abraham Lincoln Presidential Library about the fate of the Interment Books. Retaining ownership of the book that logs Lincoln’s interment in the cemetery is critical to the city, and so they are being particularly careful with what they actually agree to. The books are being “loaned” to the library, not “deposited” there. This may be a distinction without a difference, it is easier to lose ownership of deposited items.
The Mayor recognized the Grant Middle School track team, which recently took first place at their state content. He also recognized the Bicycle Advisory Council for helping make the city more bike and pedestrian friendly.
Dentists from the ISDS Foundation discussed the upcoming Mission of Mercy. The Mission will provide free dental care to Springfield residents who may not otherwise have access to a dentist. This event will be discussed more in a dedicated article.
You can watch the full meeting in the player above.
Springfield Police celebrate six promotions
The Springfield Police Department had their pinning ceremony for six officers this afternoon. James (Matt) Doss, Robert Jones, and Scott Ligon moved from Patrol Officer to Sergeant. Richard Von Behren was promoted to Lieutenant from Sergeant. Wendell (Kurt) Banks rose from Commander to Deputy Chief. And Dyle Stokes rose from Deputy Chief to Assistant Chief.
Police Chief Kenny Winslow introduced the officers at the ceremony, and spoke about the new duties and challenges that the officers would be taking on. The pinning was done by members of the officers’ families.
Property owners weigh in on Jacksonville historic districts
The Jacksonville Historic Preservation Commission wants to create two historic districts in the downtown area. Their efforts to get on the National Register of Historic Places are almost complete, and the city council has been asked to support a new Local Landmark district. Only one potential hurdle remains: winning over the downtown property owners. Wednesday night, the Commission held a public hearing to help inform them what the districts would mean for their properties, and answer questions and take feedback from them.
Cody Right, a consultant for Jacksonville Main Street, started the meeting with a presentation explaining the history of the proposal, and how the districts work. Initially there were supposed to be two meeting scheduled, but they covered much of the same material and so were combined in the interest of time.
The Two Districts
Although they appear similar, the National Register and the Local Landmark District do different things. By having a property in the National Register, property owners can get generous tax credits for approved renovation projects. If the project meets the correct requirements, the owner can get a 20 percent tax credit for the cost of the project. However, the register offer virtually no restrictions if the tax credits are not sought. State agencies have already approved the district for the register, and it is likely to go through in the near future. Still, the Preservation Commission is seeking a resolution of support from the City Council to further strengthen their application.
Creating a Local Landmark district is far more impactful for property owners. This district is created by local ordinance, and can be done with or without the National Register designation. If approved, it would create guidelines for how the appearance of historically significant buildings can be changed. To the greatest extent possible, buildings would need to retain their original styles on facades that face a street. This includes walls which were originally hidden by other structures that have since been demolished.
Both districts only apply to the exterior of the buildings. The insides can be updated and reconfigured to suit the needs of the current owners.
Business owners were skeptical of any measure which might add additional regulatory burdens. Many of the owners who attended the meeting stated that they had not been well informed that the Commission was attempting to create these districts. One man stated plainly that he felt as a property owner, he should have the right to modify his property as he saw fit. He also was concerned that while the National Register offers no restriction today, that new restrictions might be added in the future.
Members of the Historic Preservation Commission worked to put these fears to rest. They explained that while the Commission has rules and standards, they know that every project is different. The limitations of the building itself as wells the financial considerations, all go in to making a final recommendation. As Steve Hochstadt said,” the members of the commission are your neighbors.” There is already a residential historic district in Jacksonville, and few projects are rejected outright. If a project is rejected, owners can still petition the city council for approval. He went on to invite some of the property owners to join the Commission.
Even if the Local Landmark district is created, local building standards for the district will still need to be drafted. Jacksonville Main Street Executive Director Judy Tighe said that some restrictions might actually be loosened in the new standards.
The two districts are scheduled to be discussed at the next Jacksonville City Council meeting. It will start at 6:00 PM on Monday, June 25th, in the Municipal Building, located at 200 West Douglas, Jacksonville. You can watch the full meeting in the player above, or read the National Register and Local Landmark Historic Districts application and FAQ.
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