An influx of tax dollars has helped produce a 10% increase in Normal’s year-end general fund balance, according to a mostly positive report presented to the Town Council on Monday.
But Finance Director Andrew Huhn cautioned that some concerns remain, particularly noting low funding levels in the police and fire pension plans and the health and dental insurance fund.
“Outside those things, the town is in pretty strong fiscal health general fund-wise,” said Huhn, who delivered the annual Financial Trend and Condition Report. “Our debt is going down, we’re seeing a good increase in income tax and state sales tax.
"There's no quick answer to it, other than methodically looking all the time which our council does."
“We’re not without problems for sure, but I don’t see a lot of challenges beyond the stuff we’re always doing like the pension funding.”
According to state law, those pension plans need to reach a 90% funding level by the year 2040. Currently the police pension funding is at 56% while the fire pension plan is at 62%.
The report states that pension funding remains a significant long-term issue for all municipalities, but that the town’s goal is to reach 100% by 2040.
Huhn said one possible solution is for the council to adjust its projections to be “a little more conservative in terms of interest earning.” He added that his department is hopeful the state will make pension relief available and consider pushing back the deadline.
“It’s a huge problem and there’s no quick answer to it, other than methodically looking all the time which our council does,” he said.
The report pointed to a large spike in prescription expenses causing the significant reduction in the health and dental fund balance over the past three years. The amount spent on lifesaving specialty drugs rose from less than $150,000 in the 2013 plan year to more than $1 million in each of the past two years.
“We’re seeing some (fund balance) decreases there and we want to address that, which we will in the budget cycle coming up,” said Huhn.
Of the 34 fiscal indicators included in the report, 21 were identified as positive while only seven were negative. The general fund cash balance stood at $15.85 million, up from $14.37 million a year ago.
State income tax revenue grew by 7.1% to $5.1 million, while state and local sales tax revenue saw 4.2% increases for a total amount of more than $25 million ($16 million local).
“It was nice to see the sales and income tax (revenue) come back a little stronger than we expected,” said Huhn. “We’re seeing activity there that’s nice to see. It’s good for the economy.”
Normal Mayor Chris Koos spoke about the financial trends report on WGLT's Sound Ideas on Tuesday:
You can also listen to the full interview:
Other Business
The council unanimously approved a series of design code variances requested for the Fiala Brothers’ Brewhouse development. The new owners of the former Bill’s Key and Lock location at 127 E. Beaufort St. plan to raze most of the existing one-story structure and build their two-story microbrewery.
All five items on the omnibus vote agenda were pulled for discussion, three by Council Member Karyn Smith and two by Council Member Stan Nord. The two were the only ones to vote in favor of Smith’s proposal to amend the minutes from the Sept. 3 meeting and against approving the minutes as presented.
The other four items on the omnibus agenda – expenditures as of Sept. 11, an amended lease agreement with the Illinois State University art gallery, a $33,000 contract with Layne for drilling three test wells, and accepting a $112,000 quote from Presidio Networked Solutions Group for body camera video storage facilities – were approved unanimously.
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