City Releases Financial Forecast

Date: January 31, 2018 - 5:00pm

The City of Urbana has released its Financial Forecast for FY2019 – FY2023. The Forecast focuses on the City’s General Operating Fund, which provides funding for most basic services, such as police and fire protection, and most public works services.

In a memo to the Urbana City Council, Finance Director Elizabeth Hannan reported that Urbana faces challenges common to many other cities in Illinois, including stagnant sales tax revenues, increasing pension costs, and declining state-shared revenues. All of this has led to a structural deficit, with expenditures growing faster than revenues. According to Mayor Diane Wolfe Marlin, “Like it or not, we are faced with a new reality. Our future depends on how we respond now. We must make strategic decisions that are in the City’s long-term interest.”

The Forecast recommends planning for $500,000 in budget reductions in FY2019, with the expectation that budget reductions and new revenues may total $2.5 million over five years in order to bring the budget into balance and begin to address long-term funding needs. Without these adjustments, it is likely that the City would have to make cuts that are even more significant in the future. The Forecast will be updated annually so that adjustments to the plan can be made in a thoughtful way to avoid over- or under-correcting.

Strategies for addressing the financial challenges include asking City Council and staff for input, planning for $500,000 in budget reductions in FY2019 and $750,000 in budget reductions or new revenue in FY2020, evaluating available revenue options and limiting expenditure increases, building city reserves, preparing an inventory of city services and evaluating them in terms of city priorities and goals, and considering revisions to financial policies related to levels of recurring expenditures and city reserves.

“We will have to make some painful choices now to focus on long-term financial sustainability. We will also continue to actively promote sustainable growth and development of our tax base. This will serve our citizens in the long run,” Marlin noted. “We are building a strong foundation for our future.”

The Forecast will be reviewed with the City Council on Monday, January 8 at 7:00 p.m. at the Urbana City Building and televised on UPTV (Comcast channel 6 or U-Verse channel 99). Hannan and Marlin also will present this information to City employees in a series of meetings scheduled over the next three weeks.

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Created on: Thursday, January 4, 2018 - 17:01
- Author: admin