Time will trash Garbage Fund balance

While the city of Morris remains in strong financial shape, the annual audit showed a continuing negative trend in the Garbage Fund. Bill Crawford presented the audit for the fiscal year that began May 1, 2007, and ended April 30, 2008, to the Morris City Council Monday night. Mayor Richard Kopczick said that within one year to 18 months from this fiscal year, the city will have to have a different means of paying for garbage pickup. For a couple decades at least, the city has paid for garbage collection with revenues from Environtech and, previously, Community Landfill. In addition, the landfill has accepted city waste at no charge. However, as Environtech nears capacity, it is accepting less waste, resulting in smaller payments to the city's Garbage Fund. Crawford reported the balance in the Garbage Fund has gone from $1.77 million on April 30, 2005, to $859,965 on April 30, 2008. Revenues to the Garbage Fund for the last fiscal year were about $270,000, mostly from property taxes. Gate fees and royalties from Environtech to the fund totaled $22,900. Expenses, mostly for garbage pickup, exceeded $700,000. Once the Environtech Landfill closes in four years, the city will also have to pay for disposal of its garbage. “We would have to increase the tax levy by more than $1 million,” the mayor said, to pay for garbage collection. As a result, the city may have to look at instituting a monthly garbage charge, which is what most communities do. The curbside recycling program is paid for from the Solid Waste Tax fund. That fund has gone from a balance of $1.68 million on April 30, 2005, to $445,926 on April 30, 2008. The Solid Waste Tax fund received landfill taxes from Environtech of $298,000 in the last fiscal year. Expenses paid from the fund totaled $891,000, including $261,000 for the recycling program. Most of the remainder of the expenses were connected with the closing of Community Landfill and a payment of $72,444 to Grundy County to fund its solid waste office. The mayor noted the current tax levy for garbage collection would just about pay for the recycling program. Crawford reported the other major city funds were in strong financial condition. On April 30, 2008, the city had a balance of $29.9 million in all funds. The General Fund ended the year with a balance of $4.75 million, an increase of $239,696 from the previous year. “You have about seven months worth of expenses (in the general fund),” Crawford said. “That is a good amount, a healthy amount for the city.” General Fund revenues totaled $7.5 million, including $4.1 million in sales taxes, $1 million in income taxes from the state, and $1.1 million in property taxes. The city actually collected $5 million in sales taxes, but refunded $864,487 under agreements with Ritchie Brothers, Bell Fuels and Minority Development. In July 2008, the 10-year agreement with Ritchie Brothers expired, so the city will no longer refund 60 percent of the sales taxes collected at Ritchie's auctions. Crawford said that, for the first five months of the current fiscal year, sales tax revenues have continued to increase. “I don't expect that to continue,” he said. “I know from my private clients they are not paying as much in sales or income taxes.” Mayor Kopczick said the high gas prices during the summer probably contributed to higher sales tax revenues this fiscal year. (With its 1 percent sales tax, the city would get four cents on a gallon of gas costing $4 and two cents on a gallon costing $2.) Crawford reported city payroll for the year ending April 30, was $6.48 million, up from $6 million the prior year. Of this amount, $4.4 million was for salaries and the remainder for insurance and retirement benefits. He explained the increase in salaries, which was larger than in prior years, was due to the new police contract, which resulted in retroactive pay to cover the 19 months the officers worked without a new contract. Because of the new East Side Sewage Treatment Plant, the Water and Sewer Fund balance showed a major decline. As of April 30, 2007, the fund had a balance of $17.1 million, which included a bond sale of more than $7 million to pay for a portion of the treatment plant. By April 30, 2008, the treatment plant was basically completed and this resulted in a drop in the fund balance to $8.58 million. Water and sewer fees continue to increase and were up about $340,000, to $2,969,132, for the year ending April 30, 2008. The Tax Increment Financing Fund ended the fiscal year with a balance of $1,835,567, up slightly from the prior year. Revenues of $4.6 million included $3.6 million in property taxes, $460,156 in state sales taxes, and $439,656 the city transferred from the General Fund to receive the state sales taxes. Crawford reported the city's assessed valuation has increased 13 percent each of the past two years. In 2005, for taxes payable in 2006, the assessed valuation was $231.5 million. In 2006, for taxes payable in 2007, the assessed valuation was up to $261.3 million, while for 2007 taxes, payable in 2008, it was $295.2 million. The city has maintained property a tax rate of about .65 percent for many years and resulted in about $1.9 million in property taxes collected for all funds in 2008. Crawford said if property values decline, this will result in much slower growth in the city's assessed valuation. Alderman voted unanimously to accept the audit.