November 15, 2023: Elgin City Council Budget Discussion (2 of 4)

Editor’s Note

The budget can be viewed online via an interactive budget portal. It can be translated into other languages and it is best used on a desktop or tablet.

Glossary of Basic Terms

• Revenue: Money earned
• Expenses/expenditures: Money spent
• Budget (verb): Plan for a certain dollar amount
• Reserve fund/Cash reserves: Basically, emergency savings.
• Infrastructure: Structures that a city owns and maintains that provide essential services to its residents. Examples are roads, public buildings, power lines, parks, etc.
• Capital improvement::Construction projects to improve infrastructure not related to water and sewage. A separate Utility Fund is used specifically for water and sewage infrastructure.
• Block Party in a Box: A service through the City to rent supplies that one might need to throw a block party. Supplies include tables, chairs, tents, signs, etc.

Riverboat Fund Discussion

Money that the Grand Victoria Casino makes is put into the Riverboat Fund. Most of this money is used to fund capital improvement projects.

Revenue

• The Casino consistently earns around $10 mil every year.
• In 2023, the City budgeted for using an additional $5.4 million from reserve funds (savings).
• The actual amount of money the Casino earned in 2023 is around $11.4 million. This doesn’t include money from the reserve funds.
• Most comes from gaming proceeds (72%)

Expenditures

The City expected to spend $16.7 million from the Riverboat Fund in 2023. Actual expenditures are around $15.8 million.

There’s an extra line item in the expenses called “Commodities and Supplies” that wasn’t originally accounted for in the 2023 budget. This is expense amounts to about $1.6 million and is due to an LED streetlight project from 2022 carrying over into this year. Despite this unexpected expense, actual expenditures are still under the budget.

2024 Budget

Expected revenue is $10.8 million, which is consistent with prior years

Expenditures are budgeted for $16.4 million. The city plans to use about $5.7 million from reserve funds to cover the difference between revenue and expenses.

Larger projects planned for 2024 are:

• Capital expenditures
  • City building repairs
  • Elgin Sports Complex
• Other:
  • Cultural and community services
  • Economic development, including development of the auto mall (the strip of car dealerships on Randal and 90)
• Financing Transfers: Moving money to equipment replacement fund to replace safety vehicles
• Contractual
  • Engineering services for planning the capital improvement projects
  • Tree services for removal and planting

(Editor’s note: Look at the budget book for a full list of planned projects. I may or may not try to write a summarized list of future projects.)

Extra Context

• Before 2020, the Riverboat Fund paid for all street resurfacing.
• From 2020 to 2022, the City received a total of $7.1 million from Rebuild Illinois Funds. This, plus money from the Motor Fuel Tax (MFT) has funded street resurfacing for those years.
• Starting in 2024, the City will not be receiving money from the Rebuild Illinois Fund.
• By 2027, the Riverboat fund will have to pay for all street resurfacing projects again. Other projects will have to be budgeted into other fund categories.

Councilmember Comments

• Steffan is concerned that new casinos opening in nearby towns could affect attendance at Grand Victoria.
• Ortiz asked why the Youth Sports Capital Grant is budgeted for $150,000 this year but $100,000 next year. Maria Cumpata, Parks and Recreation Director, clarified that they plan to update facilities this year.
• Powell asked about the Placemaking Project initiative that is budgeted for $400,000. This was supposed to be for building a new skate park in 2023, but the location of the park has not been settled on yet. City Manager Kozal suggested that the Riverfront Development sites could be an option.
• Rauschenberger commented that she is in support of everything except for the $3 million allocated to installing artificial turf for the Elgin Sports Complex due to environmental concerns.

Special Events Discussion

The budget for the Department of Cultural and Special Events (DCASE) is increasing by $1.2 million in 2024, which is a 45.69% increase from the budget for 2023. With this higher budget, DCASE plans to significantly expand their programming for 2024 and beyond.

During this meeting, Create Today, LLC presented market research to support increasing special events programming. Amanda Harris, Director of DCASE, then presented on the work of DCASE and the plans they have.

Market Research

Market and demographic analysis

• The Latinx population is growing nationwide.
• Communities are shifting from majority white populations to majority non-white populations.
• The Latinx population in Elgin is growing more rapidly than other groups. In Illinois, Elgin is ranked 5th in population growth, but 3rd in Latinx population growth.

Indoor and Outdoor Venue Comparison

Create Today compared arts and culture venues within 50 miles of Elgin. Their research included 22 indoor venues with an average capacity of 1,250 and 6 outdoor venues with an average capacity of 1,400.

The map in the image below shows the location and capacity of these venues as compared to the population density of the Chicagoland area. Red circles represent outdoor venues and blue represents indoor venues. The bigger the circle in the map, the higher the venue’s capacity. Furthermore, the darker green an area on the map, the more dense the population.

The largest venues on this map are in Elgin, Aurora, Rosemont, Highland Park, Waukegan, Hoffman Estates*, Wheaton*, and Rockford. The population density is very low west of the Elgin area, with higher concentration in DeKalb and Rockford.

(* I can’t really see the labels on the map so location is approximate).

In the next five years, the population of this same area is expected to grow the most in the far west suburbs. The map in the following image shows areas of expected population growth and the location of the venues. Red stars represent outdoor venus, blue diamonds represent indoor venues, and dark green areas represent areas projected to have a large population increase. Most of these areas are to the west (the left side of the map) to the Fox River Valley.

As the map shows, there are not any cultural arts venues of significant size between Elgin and Rockford (along route 90), where the most population growth is expected. Because of this, Create Today believes there’s an opportunity to attract the growing population between Elgin and Rockford to Elgin-based events.

Financial Impact of Cultural Arts

Americans for the Arts recently completed a nationwide study of the economic and social impact of cultural arts nonprofits. This study, called Arts and Economic Prosperity 6 (AEP6), found:

• 86% of respondents report that arts and culture is important to their community’s quality of life and livability
• Cultural arts events generated $151.7 billion in economic activity.
• There are 2.6 million jobs in the nonprofit cultural arts industry.
• Local, state, and federal governments earned $29.1 billion in tax revenue from cultural arts.

On average, 30% of attendees at an event are from a different area. These out-of-town attendees spend twice as much in the event’s town as local attendees. This includes spending for accommodations and gas as well as spending in restaurants and local businesses.

Department of Cultural Arts and Special Events (DCASE)

DCASE oversees operations of:

• The Hemmens
• Elgin Art Showcase
• Festival Park
• Wing Park Bandshell
• Community Engagement Committee, a group of staff from about 10 departments
• Special Events, including major and community events
• Cultural Arts Commission

2022 and 2023 review

In 2022, DCASE organized:

• 22 special events
• 40,000 attendees
• 60 event permits, including 21 block parties

In 2023, DCASE organized:

• 38+ special events
• 70,000 attendees
• 100 event permits, including 5 co-sponsored events and 45 block parties

The majority of events happen between the beginning of May through the end of September.

Staff Time Commitments

A typical Block Party in a Box application takes an average of eight hours of staff time to process, which amounted to 224 hours in 2023. In comparison, one Movie in the Park takes about 50 hours of staff time, and a major event like Nightmare on Chicago Street takes hundreds.

Expanding programming requires more staff to successfully plan and run more events. Adding one new full-time staff member equals 2,080 more hours a year for someone to commit to new programming.

Plans for 2024 Budget

• Laser projector purchase
  • This is to support the expansion of Movies in the Park.
  • Movies in the Park was the second most attended program in 2023.
  • Feedback suggests hosting movies earlier in the day to accommodate sleeping schedules.
  • A laser projector is needed to show movies when there is still daylight.
  • Renting a laser projector doesn’t allow for flexibility in timing or dates if needed.
• More cultural programming
  • As the market research presentation showed, communities are becoming increasingly diverse.
  • DCASE plans to support more events for these diverse populations by increasing co-sponsored events.
  • Co-sponsored events are not organized by the City, but the City provides support and funding to the event organizers.
• New position for Hemmens Cultural Center. Responsibilities include:
  • Booking larger stages
  • Planning new programs for 2025 (it's too late to add to the 2024 schedule)
  • Attracting more well-known performers to include the Hemmens as part of their performance tours.
  • Learning the role of the Cultural Center Director - Butch Wilhelmi has been the director for a long time, but there is not a person who could easily take over his role if he left.

Plans for Expansion

• Concerts in the Park: Increasing from 4 to 11 concerts
• Movies in the Park: Increasing from 4 to 10 movies, including movies that adults would enjoy (not just kids movies)
• Increasing large scale programming for 2025 and beyond
  • Needs at least one new Special Events Manager, which is not yet accounted for in the General Fund budget.
  • The beginning salary for this position is around $82,000 to $86,000 (pay grade 813 to 814).

Councilmember Comments

• Powell asked the following questions:
  • Where will Concerts in the Park be held?
    • Lords Park shelter
    • Wing Park bandshell
  • Where will Movies in the Park be held?
    • Depends on capacity. DCASE tries to move around to different areas of Elgin.
    • If a park has new renovations, they will be prioritized to show off the new facilities.
  • How are we strengthening support for co-sponsorship program?
    • DCASE has not figured out exact dollar amounts yet in terms of how much money to allocate for direct cash funding and in-kind support (for example, supplies and equipment).
    • Currently, co-sponsors receive $5,000 cash and $10,000 in-kind.
    • Based on post-event feedback, the ratio of cash to in-kind support may need to shift.
• Powell would also like the City to prioritize unique events that set Elgin apart from surrounding communities.
• Good calculated that the City would receive $11,000 a year from Block Party in a Box rentals if it is consistently fully booked for the whole season.
• Dixon asked the following questions:
  • What is the financial impact of special events on Elgin specifically?
    • Since Elgin participated in the AEP6 study, Americans for the Arts does have data specific to Elgin spanning from May 2022 to May 2023. The study will be available to the public in the coming weeks.
    • In Elgin, nonprofit cultural events generated $8 million in revenue across all businesses.
    • An attendee spends an average of $21.35 at local businesses. In 2022, that amounts to a total of $855,200 spent in local businesses. In 2023, that amounts to $1,496,600.
  • Do current facilities have the capacity to accommodate the increasing population?
    • Most likely, especially since expansion at the Hemmens is already underway.
    • Regardless, most people have indicated that they do not want to travel far to attend cultural events.
• Mayor Kaptain wondered how we could effectively market to people west of Elgin, especially since they are likely only staying in the area for a few hours at a time.
• Mayor Kaptain also emphasized that plans will have to consider having enough good bathrooms so attendees can be comfortable.

Non-Budget Business

Disclosing Historic Designation of Property

When someone buys a historic property, they will need to sign a form saying that they understand that exterior work they do has to comply with the city’s design guideline manual.

Approved with a vote of 9-0.

Centre boiler replacement

The boiler system at the Centre is being replaced. During construction of the new mechanical room, additional and unforeseen work had to be completed so the project could stay on schedule. This work includes changing the sprinkler system and repairing faulty valves. This work amounts to about $20,000.

Approved with a vote of 9-0.

Acceptance of Edward Byrne Memorial Justice Assistance Grant

Elgin Police received a technology grant to replace old city cameras and expand the citywide camera system. The grant amounts to $15,743.

Approved with a vote of 9-0.

(Editor’s note: I’m not sure where these new cameras would be placed)