Highland Park City Council Adopts 2019 Budget With Tax Hike

HIGHLAND PARK, IL — The City Council Monday adopted a $79.7 million budget for its 2019 fiscal year. The budget anticipates an increase of more than 6 percent to the city's property tax levy, which comes before the Council for final approval next month.

In the approved budget, revenues are expected to rise by 0.5 percent when asset sales, bond proceeds and transfers are excluded, according to a letter to the mayor and the Council from City Manager Ghida Neukirch. Spending, excluding fund transfers, will be 13.4 percent lower than 2018, as a result of lower capital expenditures as part of a 10-year plan from the city. Total expenditures exceed total revenues by nearly $2.4 million, covered by strategic draw-downs of excess revenues to produce a balanced budget.

“The City’s budget is its most important policy statement and guides the City’s immediate and long-term plans. The 2019 budget reflects the needs of our community and meets our operational and financial obligations,” said Mayor Nancy Rotering in a release announcing the budget's adoption. “This budget allows the City to continue to strategically achieve our goals and focus on our core priorities while being cognizant of potential challenges and opportunities.”

The budget includes an 6.1 increase to the 2019 levy for the city and library. The property tax hike equates to an extra $235 on the annual tax bill of the average Highland Park household of $500,000, according to Finance Director Julie Logan.

"The city's portion of the increase is necessary given continued pressure to fund public safety pensions is draining resources away from support of city services and capital improvement," Logan said. The state requires that public safety pensions be 90 percent funded by the year 2040. Highland Park is funding pensions at an accelerated pace to minimize the longer term impact on residents.

Staffing at the city has continued to decrease. There will be the equivalent of 1.11 less full-time employees on city staff. The number of people working for the city has remained level over the past five years and remains significantly lower than it was 15 years ago, according to Neukirch. The latest reductions result from the closure of youth services, as other positions were removed but replaced with other jobs with similar or identical responsibilities.

Some increased expenditures this year include $900,000 for higher contractual services, $700,000 in additional personnel costs due to salary adjustments, $500,000 in higher debt service expenditures.

The Highland Park collects about 7 percent of property taxes paid within its municipal limits. That money comprises 18 percent of the city's budget. Sales taxes and water and sewer fees each make up another roughly 18 percent. Half of the city's total budget goes to fund the police and fire departments.

The 2019 budget includes $8.9 million in capital improvements for 2019, and the city plans more than $94 million in additional improvements over the next 10 years. Of that, 30 percent of the capital spending will go toward sewer systems and 28 percent will be spent on streets and lighting.

Capital spending highlighted by the city manager included $3.6 million for water and sewer infrastructure improvements, $3.3 million for street, bridge, bike-walk, sidewalk, parking, ravine and tree infrastructure improvements, $1.1 million improvements to for public safety, public works and technology and $0.9 million for upgrades to the city's facilities improvements.

In terms of fees, the cost of certain citations would rise, an administrative hearing fee would increase from $40 to $50, fees for liquor licenses would increase and water bills will rise. The budget includes an increase of $3.39 per 1,000 cubic feet of water. Neukirch said the rate hike was based on an established water rate pricing model, and Highland Park water remains in the cheapest quarter of available municipal water in the Chicago area.

The budget was adopted after a series of neighborhood meetings, four budget workshops and a public hearing. A "Truth in Taxation" hearing is scheduled for Dec. 10 due to the proposed 6.1 percent increase to the property tax levy, which exceeds the amount permitted under the state's tax cap law.

“The Mayor, City Council and City staff worked collaboratively on the preparation of the 2019 budget, which resulted in an operational plan that will provide outstanding services while maintaining a stable positive financial outlook," Neukirch said, announcing its passage. "City staff will continue the City’s tradition of excellence in providing public service, budgeting, and financial reporting.”

City staff directed questions about the budget to the finance department, which can be reached by by email or by phone at 847-432-0800.

Full Fiscal Year 2019 City of Highland Park Budget »

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