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Local News

Joliet officials now say $8.7 million deficit may be gone by year's end

JOLIET – The city deficit in 2015 is not so bad after all. It may even turn into a surplus when the year is over.

The 2015 budget forecast a nearly $8.7 million deficit in the General Fund, which covers most basic city services. City officials planned to borrow from reserve funds to cover that deficit.

But councilman John Gerl said the city is currently running a $5 million surplus without even counting millions of dollars coming in since the state has released casino tax dollars due to Joliet since June.

Gerl made his comments at Tuesday's City Council meeting after a meeting of the council's Finance Committee in which city officials went over the latest financial reports.

Bills coming in at the end of the year will still have an impact on the city's balance sheet. But both Gerl and the city's finance director said they expect Joliet to end the year close to breaking even.

"It's hard to predict," Gerl said. "But based on the numbers I'm seeing here, I don't see us coming close to an $8.5 million deficit. We might even see a slight surplus."

The 2016 budget had included a property tax increase and a hike in the real estate transfer tax while still borrowing from reserve funds. Both taxes have been rejected by the council, leaving City Manager Jim Hock saying the city may have to borrow $7 million from savings to balance the budget in 2016.

The proposed budget, which was released Nov. 30, estimates the city will end 2015 with a deficit of $4.6 million, down from the original forecast but not down to zero.

Next year's proposed budget does not include money for pay raises for the city unions, which have just begun negotiating contracts. And, Hock has said he has no money to replace patrol cars or cover other capital expenses.

Mayor Bob O'Dekirk said he believes the city is creating an accurate budget for next year.

"We've always said we wanted to budget accurately," O'Dekirk said Tuesday. "There's no reason to believe that the numbers we're looking at now are not realistic and are inflated numbers."

Finance Director James Ghedotte agreed with Gerl's analysis that the city's projected deficit for 2015 will likely disappear by year's end.

"We will not be at the $8 million," Ghedotte said. "It does look like we'll be at break-even or even add a little to the fund balance."

Gerl said given the size of the city's budget, an $8.5 million difference in the end-of-the-year balance is understandable.

"A 5 percent swing here or there is a $10 million difference," he said.

The $8.7 million deficit was projected in the city's General Fund, which included 2015 budgeted expenditures of $173 million.

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2015 DEFICIT TIMELINE

• $8.7 million – Projected deficit in budget approved in December 2014.

• $4.6 million – Estimated year-end deficit in 2016 budget released Nov. 30.

• About 0 – Latest deficit forecast Tuesday.

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