By RICK SNIDER
For Rantoul Press
Since my arrival in December as the new village administrator, I have been through an exciting and busy time, meeting with staff and community members to learn about current and future concerns. Some challenges are unique to Rantoul while others are more common across rural Illinois.
Despite initial successes in the redevelopment of the former Chanute Air Force Base, the village has endured a protracted period of economic uncertainty and decline. Witness the one-third fall in residential property values in the eight years from the start of the Great Recession through 2016. Falling off this cliff drives the property tax rate skyward, increasing the burdens on homeowners and businesses alike.
Rantoul is impacted by its location in a state that lags the Midwest and the national economy. Illinois has achieved only about 40 percent of the growth of its neighbors and continues to wrestle with a lack of in-migration.
The economic stagnation is clearly visible when you examine the past 12 years of tax payments to Rantoul. From 2007 through 2019, there has been nearly zero real growth in state-shared revenues. We collected $3,779,731 in 2007; the 2019 projection is for $4,602,099, barely keeping up with inflation over the same period. Furthermore, Gov. Rauner’s proposed 10 percent reduction to local income tax payments will result in a loss of over $148,000 if adopted.
Beyond the financials, obstacles such as the stabilization of real estate values, improvements in primary and secondary education, attracting new residents and businesses to invest in Rantoul, and raising the bar in terms of service delivery from the village to its residents must be addressed. Overcoming these are a daunting task; to be successful; we must first establish a solid financial foundation. If we can’t fund the future, there is no future. Doing so requires three actions now:
1. Manage the budget.
Village spending must be contained in a low-growth environment. Transfers from our utilities to support village operations have grown nearly 77 percent in the past two years. This is not sustainable. Spending more requires more taxes or increases in utility rates, greater than what would otherwise be dictated by rate studies.
In the development of this year’s budget, we eliminated an initial deficit of over $2.6 million. This was accomplished through some major changes, some of them necessitating unhappy choices. For example, our expense to maintain our 112-vehicle fleet translates to over $5,000 per vehicle per year, many times industry norms.
Reducing excessive expenditures will let us acquire new vehicles and save on unnecessary service calls and downtime, while replacing aging units that are between 15 and 20 years old. Unfortunately, this will result in job losses.
Another sensitive issue involved our health insurance coverage, our largest single cost consuming one-sixth of general fund expenditures. Changing to a fully insured plan will let us improve benefits for employees without increasing premium costs, all while saving the village approximately $481,000 over the next two years.
2. Develop a detailed economic development plan.
The Rantoul Tomorrow initiative gave us a roadmap to work with, and the mayor and village trustees have since identified several important strategic goals. The next step is to create a detailed plan that incorporates community assets and establishes a feasible path forward to bring new residents, new businesses and the associated jobs and wealth to Rantoul.
Some of you may say "Oh, I’ve heard this before." It’s a fair comment. Yet the fact remains progress is not going to come without a well-defined economic strategy with specific objectives and milestones to measure results.
3. Establish a long-term financial plan.
Once our goals and objectives have been identified, we must work toward a long-term financial plan to provide the necessary tools to support economic development and service delivery. To balance the budget, we have deferred purchases of new public safety vehicles, including a new platform truck for the fire department, replacement of HVAC systems, recreation equipment and many other necessities.
Delaying the inevitable is not sustainable, however. Facility and equipment maintenance and replacement must be evaluated and planned. Creating a long-term plan is a sound practice that is recommended by the Government Finance Officers Association.
We must address changes in personnel policies to prevent windfall payouts that jeopardize long-term village finances. The payout of leave accruals for two recent retirements generated accelerated payments to the pension system of approximately $165,000. While budgeted and required under system rules, these costs are not affordable and exceed the commitment the village has already made for employee benefits.
Changes to personnel policies could reduce or eliminate these payments in the future. With a large number of employees reaching retirement age over the next five to 10 years, this is an important issue to tackle.
None of the proposals offered should be taken as a criticism of past choices by previous administrations. Managers must deal with the specific facts and circumstances at hand. Circumstances can quickly change and an idea or program that may have had merit at one time may not at a later time
The only truth we can absolutely rely on is that the village cannot spend more money than it takes in. Actions today, while difficult, will prevent the necessity to implement harsher measures down the road.
Rick Snider is village of Rantoul administrator