Urbana Proposes “Foundation For The Future” Budget With Spending Cuts & Tax Increase

Mayor Diane Marlin says declining tax revenues mean Urbana’s general fund balance is in danger of falling below the 15% of recurring expenditures recommended by city policy guidelines. So she’s proposed a new $45.9 million city budget for fiscal year 2018, that includes spending cuts and a tax increase.

Marlin proposes a hike in Urbana’s food and beverage tax, from its current 1% to 1.5% (By comparison, Champaign’s food and beverage tax is set ate .5%, although Urbana city officials say other towns in the area have food and beverage taxes as high as 2%) The mayor says she hates raising taxes, but feels the food and beverage tax poses the least burden on residents.

“We have so many visitors in Champaign County”, said Marlin at a Monday news conference announcing her budget plan. “It’s a tax that visitors to the community help pay, as do, for example, the local motor fuel tax. So, as far as having an impact on residents and individuals, this seemed to be a reasonable place to turn to.”

The Urbana budget proposal also proposes increases in various other city fees, including a 2.5% increase in the Sewer use Charge, a 2% increase in the Stormwater Utility Fee, a 2.5% increase in the Recycling Tax and a hike in campus and hospital zone parking meter rates from $1 to $1.25 an hour. That last increase would match planned increases in Champaign and on the University of Illinois Urbana-Champaign campus.

The budget plan would freeze salaries for management positions in Urbana city government, and provide what Marlin calls “very modest” raises for union and some non-union city workers. The city would offer other employees a voluntary separation program with incentives to retire early if doing so produces substantial savings.

Meanwhile, the budget plan would include funding for one new manager at the top of the city staff structure. That would be the reinstatement --- as Mayor Marlin had called for on the campaign trail --- of the post of city administrator.

“The administrator will focus on economic development, long-term planning, and implementation of the goals and policies of the mayor and city council,”, said Marlin.

The city of Urbana hasn’t had an administrator since 2007, when then-mayor Laurel Prussing decided not to renew the contract of then-administrator Bruce Walden. Prussing ran city government herself with a chief of staff. But Marlin says chief of staff Mike Monson is retiring this summer, and the post will not be refilled, to make it possible for the city to pay for a city administrator.

Another post to be left unfilled will be that of Community Development Director, once Elizabeth “Libby” Tyler retires from the position in the summer. Marlin says she wants to restructure the Community Development Department to make a better fit with the new city administrator’s post.

The budget calls for several other budget cuts, from shelving plans to buy a new bucket/auger truck, to reductions in spending in everything from outside legal help to the mayor’s travel budget.

The budget also calls for putting $5.26 million in property tax revenue paid by Carle and Presence Covenant Medical Center into a separate general reserve fund, instead of keeping it in the the general corporate fund reserves. That money is the subject of litigation over whether Urbana’s two hospitals are justified in claiming tax-exempt status for their charity work. Mayor Marlin says the recent Illinois Supreme Court ruling sending the case back to a lower court diminishes the likelihood that the city will ultimately be allowed to keep the money.

Despite reductions in other areas, the Urbana budget plans calls for several needed street resurfacing projects, including work on Lincoln Avenue, Vne Street, Race Street, Springfield Avenue and contiknuation of the $2.9 million MCORE project on Greet Street through the Urbana side of the University of Illinois campus and adjacent Campustown.

Discussions of the Urbana city budget plan are planned over the coming weeks, with a public hearing on June 5th, and the presentation of a budget ordinance to the Urbana City Council on June 19th.