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Wednesday
Nov142012

Des Plaines Is Fiscally Sound, Dramatic Break From Past

City of Des Plaines Budget Health Check – 2013 Budget Year

I was recently asked a simple question that didn’t have a simple answer: “How can I learn more about our city’s budget?”  Attending marathon meetings, downloading huge files off the city website, or combing through the 451 page budget might be a start but that isn’t fair to taxpayers.  After all, the people funding the budget – you and I – shouldn’t need to invest hours to understand how our city is performing.  

At our last monthly 3rd Ward Meeting, I shared a draft Budget Health Check with neighbors.  The following datasets and brief descriptions were built following that ward meeting and are designed to translate the confusing budget process for all taxpayers to understand.  Please spend a few minutes drawing your own conclusions.  I think you’ll find that:

  • We have far less debt: down from $102 million high in 2005 to $58 million in 2012
  • Savings are up: from a dangerous low of 2% to a healthy 42% of annual operating
  • The property tax levy has not increased in three year

In 2003, Moody’s – an independent credit rating agency – saw the city’s rapid debt accumulation as a risk and downgraded our credit rating.   We regained our strong A2 credit rating in 2010 after retiring & refinancing bond debt.  Identifying other relief points will ensure that we maintain our credit rating, save on interest, and invest today’s capital projects dollars in today’s projects. 

 

In 2008, Des Plaines had no savings, record debt, and a poor credit rating.  When Cook County was slow to remit property taxes to municipalities, we were forced to secure a short-term loan to make payroll.  Since then, we have made significant operational adjustments to start building back our savings while retiring debt.  A healthy and appropriate Unassigned Fund Balance will protect us from the unexpected, allow for rapid debt reduction, and promote investments in infrastructure like roads, sidewalks, and sewers.   

 

I’m proud to say that this council has paid down debt and built a savings account without increasing the property tax levy.  In the ten years before 2009, taxpayers felt an average annual increase of 3.7% with some years over 5%.   This combination of debt, savings, and tax levy proves that aggressive action can stabilize city finances. 

I hope you found this Budget Health Check helpful.  Please reach out if you have any specific questions or feedback: Matt@3rdWard.org or 847-514-6318

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