Finance Director Rings Up City’s Success to Retail

http://napervillesun.suntimes.com/news/8154196-418/on-the-right-track.html

By Hank Beckman

Stacy Kral, left, greets guests with samples of sparkling wine Monday evening during the grand opening of Cooper’s Hawk in the Freedom Commons development. Jeff Cagle / For Sun-Times Media

While the rest of the country continues to struggle, Naperville’s finances are slowly improving, City Finance Director Karen DeAngelis said Monday.

However “it’s very, very early now (in the budget process),” DeAngelis said of the city’s preparation for its fiscal year 2013 budget.

Speaking before the Naperville Area Chamber of Commerce’s Legislative Committee luncheon at the Hotel Arista, DeAngelis said that retail sales taxes were a key factor driving Naperville’s recovery.

She said the city has seen a $1 million improvement in retail sales tax revenues in fiscal year 2012 compared to the previous year. This is helping to offset a continuing slump in real estate sales, she said.

The city has also seen a slight reduction in population due to foreclosures, which reduced the city’s share of state income tax.

DeAngelis, however, sees hope for the city’s real estate sector, noting that commercial real estate, helped by a few large deals, is starting to show signs of life.

“We are starting to see commercial property move,” she said.

Earlier projections were that the city would have to cope with an $11.2 million shortfall in fiscal year 2013. But estimate revisions of $4.8 million and an excess fund balance of $3 million bring the projected gap down to less than $4 million.

The overall budget for fiscal year was $27.3 million, the highest since the fiscal year 2007 budget of $27.1 million.

“We’re getting back to where we were before the recession hit,” DeAngelis said.

DeAngelis said that some credit for reducing the shortfall between revenues and expenses should go to city departments, all of which came in at or under budget.

“There is no sign that expenditures are out of line,” she said.

She also noted savings in claims reductions in medical and worker’s compensation cases.

Things are still difficult, though. DeAngelis pointed out that, for the first time, the city’s total equalized assessed valuation has dropped for three years running.

State Reps. Michael Connelly (R-Lisle) and Darlene Senger (R-Naperville) also briefed the Chamber members on state legislative matters.

Senger said that efforts to reform state pensions were starting to bear fruit, including progress on SB-512, the legislation aimed at giving state employees a range of options for their retirement.

“If we don’t do something with the pensions, our next year’s budget is going to be a disaster,” she said.

Senger said that state officials were staring to study the creation of the exchanges necessary to implement national health care reform.

To facilitate the program, the state is seeking a $92 million grant, which Senger stressed would only be for the creation of the system.

“Then we will have to maintain it,” she said.

One audience member asked if the exchanges would be, in effect, an unfunded mandate.

“You’re right,” Senger responded, stressing that many other states have sued the federal government in opposition to parts of the law.

“Our attorney general is not interested in joining the lawsuit,” she said.

Sister Mary Jeanne Haley, of St. Patrick’s Nursing, Residence and Rehabilitation, asked about legislation proposed last year that would have hiked the per-bed state tax on nursing homes, currently $1.25.

Haley noted the problems a hike would cause nursing homes.

“Nursing homes are going to close,” she said.

Senger said that the proposal was voted down last year.

“I haven’t heard anything about it coming back,” she said.

Connelly told Haley that the proposal was another example of the state having finite resources and urged people to support pension reform as a way of freeing up revenue for other needs.

“Something’s got to give,” he said, “or taxes will have to be raised.”

Senger agreed, saying that the most important step citizens could take was to let their state representatives know how they feel.

 

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