Effingham officials outline $45 million budget, prioritize reserves and downtown projects

Effingham city staff presented a proposed fiscal plan that projects roughly $45 million in revenues and reserves and emphasizes maintaining multi-month operating reserves while advancing several downtown and infrastructure projects.

At a budget workshop, a presenter summarized the schedule and scope for the FY budget, saying, "We did a dry run last week and it took about an hour," and noted a public hearing will be held on April 7 with formal council approval expected at the second meeting in April. The presenter reviewed revenue assumptions, including last year’s property tax figure cited as about $4,380,000 and state sales tax (including cannabis) projected at $11,000,000. "We've had pretty good sales tax returns this year," the presenter said.

City staff said end-of-year carryover across funds is roughly $15,000,000 (about $12,000,000 in cash, with other amounts in investments and restricted funds such as drug forfeiture and IMRF). The presenter described policy targets for contingency reserves (set at 2% of expenditures excluding grants) and said undesignated reserves—about $4,600,000—would provide an estimated three to four months of operating cash.

Finance-related details were reviewed by Dennis, who explained personnel-related line items: "Our overtime and wages, that's not purely just overtime. That also includes vacation buyback when an employee sells back vacation time," and noted payroll taxes "that's 7.65" of wages and a 10% IMRF employer contribution for the year.

Economic development and TIF funds featured prominently in the discussion. The presenter said TIF 1 is expiring and its remaining $1.1 million carryover is earmarked for the Santa Maria project, while central TIF dollars are being used to cash-flow water and sewer work tied to the Fayette corridor that the city expects IDOT to reimburse. The presenter cautioned that some potential reimbursements and grants remain uncertain and flagged pending appellate-court matters connected to Village Square Mall funding.

Tourism and special projects were also discussed. Jody, representing the tourism program, described marketing plans and a digital-passport initiative and noted tourism revenues and grants support a mix of marketing and match requirements. The presenter said a $2,000,000 special-projects line would remain available to respond to requests from groups such as the convention center and event venues, but council members have not yet committed funds to specific projects.

Why it matters: Staff framed this workshop as a step in a multi-week adoption process. Officials said the budget seeks to protect reserve levels while continuing capital work—especially for downtown improvements and infrastructure linked to the Fayette project—and to keep projects moving without borrowing where possible. A public hearing is scheduled for April 7; the council is expected to consider formal approval at its second April meeting.

The meeting adjourned after a motion and voice vote.