Aldermen given first look at proposed $84.1 million budget

By Martha Stoffel

O’FALLON – The Finance Department provided an overview of the entire city budget to the Finance & Administration Committee Monday night. The FY20 budget will begin May 1, 2019 and run through April 30, 2020. 

The proposed budget reflects a twelve percent increase from the previous year totaling $84,102,168, primarily due to several, planned public works projects. City Council will vote on the FY20 budget at their April 1 and April 15 meetings, with a public hearing at the April 15th meeting. 

Public Works projects represent 50.5 percent of the total proposed FY20 city budget. The largest item being upgrades and additions to the waste water treatment plan that were included in the city’s five-year Capital Improvement Plan. The project will include the installation of a sludge dewatering facility and the installation of filters to reduce phosphorus effluent levels. Approximately $4 million from the waste water reserve account will be transferred to help fund the $9 million project. 

The Finance Department also recommended each department add a line item for capital reserves as a way to plan for long-term projects. As an example, the Community Development Department placed $25,000 in the capital reserves line for a future comprehensive plan that will likely cost $100,000 when completed in the future and the Fire Department placed $135,000 in capital reserves for a future engine replacement. 

A resolution declaring surplus of funds in the city’s Tax Increment Financing (TIF) accounts for the 2017 tax year was presented. The surpluses for TIF #3 (Central Park Drive), TIF #4 (Highway 50/Troy-Scott Road – Metroplex), and TIF #5 (Central City) represent the agreed pass-throughs. 

The final surplus was for TIF #1 (158/Rasp Farm) which expired June 2018. As part of an agreement for their participation in the property tax abatement incentive in the enterprise zone, the city agreed to declare a surplus for the remaining funds in TIF #1 and distribute the balance proportionally instead of using the balance for a sewer project within the TIF area. The balance for TIF #1 is $300,343.06 for the 2017 taxes. At the time of the committee meeting, all taxing bodies except SWIC have agreed to participate in the property tax abatement incentive. The SWIC Board of Trustees meets March 27th. 

The city also received its 2018 tax extension, based on the tax levy council approved in December. Due to a larger than expected increase to the Equalized Assessed Valuation (EAV) for the city, the 2018 calculated tax rate will be less than previously anticipated. The new tax rate for the city of O’Fallon and library will be 0.9480, down from 0.9837 in 2017. The city of O’Fallon saw an increase of $31 million to their rate-setting EAV, a 4.7 percent increase from 2017. City staff reviewed reserve account balances prior to and during committee approval and reduced the levy request at that time, so the city does not need to abate any additional taxes during the tax extension review.