Figuring our fiscal future: City Manager Gary Goddard gazes into his crystal ball presents a candid financial assessment for Galesburg

By Mike Kroll

At approximately the midpoint of the current abbreviated fiscal year for the City of Galesburg I sat down with City Manager Gary Goddard to get his assessment of where the city stands. With the mood of gloom and doom that appears to predominate many in this community you might expect Goddard to be warning of potential budget crisis but you would be surprised. "We haven’t really yet experienced the effects of Maytag yet and they may not be as severe as many fear but I expect us to begin feeling them next year and especially the year after."

Our optimistic city manager will begin his eighth year on January 2nd, a long tenure compared to the national average tenure of just less than five years. Goddard has seen this community through some pretty good years economically. A time when many projects were completed but where city politics has frequently been contentious; yet somehow Goddard has deftly managed to always juggle sufficient council support to keep his job. Goddard will tell you himself that a big part of his continued success here has been due to good financial management of the city.

A somewhat surprising revelation came out late in the interview when I commented on the length of Goddard’s tenure: he told me that he has already informed council members that he intends to retire as city manage in the spring of 2007. "I told the council that I would be leaving just as the terms of those who were elected in April conclude in May 2007. By that time I will have served as Galesburg City Manager for eleven years. This action by Goddard provides the council members ample time to plan for his replacement, assuming the City Council is inclined toward such planning.

Following the October 11, 2002 announcement by Maytag that they would be closing their local manufacturing plant, idling over 1,600 area employees, area economic news has only gotten grimmer. Right up until the November election that same year the State of Illinois continued to spend money at a prodigious pace despite warnings that all was not well with the state budget. Soon after Rod Blagojevich took office as governor state officials began to get stingy with funds heading to municipalities while simultaneously passing more and more costs down to local units of government.

. Meanwhile the national economy, which up until three years ago had enjoyed both prosperity and a budget surplus now struggles amidst rising nationwide unemployment and record deficits while President Bush and Congress reduce domestic spending, cut taxes and boost defense spending to new levels. The economic struggles facing Galesburg are reflective of conditions across the country where more and more of the burden falls on local governments as state and national leaders swim in a deepening pool of red ink.

So how does Galesburg stand today?

"Our revenues are just about what we expected and our expenditures this fiscal year are a bit lower than anticipated," explained Goddard. "The city is actually in much better shape than you might expect but to avoid getting into the kind of budget crisis the state is currently in we must we will need to tighten our belts. The City of Galesburg is already a very efficient operation but my managers and I never stop looking for ways to become more efficient."

When the Galesburg City Council approved the current fiscal year budget that runs through December 31st they did so anticipating reduced revenues this year and potentially greater reductions as the full impact of the Maytag closure is felt. Up to this point in time the real effects of the Maytag closure have yet to really be directly felt by the city according to Goddard. "The very nature of our revenue streams builds in a delay to such impacts. The far less predictable changes in state dollars has had a more direct effect on the city this year."

The current Galesburg budget put holds on most new capital projects and froze all but unavoidable equipment replacement. The single biggest expenditure in the city’s general fund, personnel costs, has already lead to the adoption of an early retirement incentive program and reductions in force through attrition. This year’s budget saw property taxes increase along with an array of user fees and as many residents anticipate fallout from the Maytag closure the natives are becoming restless. The generally accepted wisdom by elected officials is that further such increases will be dangerous to their political health.

At Monday night’s City Council meeting Finance Director Michelle Horaney announced that she expects budget discussions with the city council on the 2004 budget to begin in October with a budget approved in November. City staff are already at work on the preliminary figures and I asked Goddard if he was aware of any big surprises in store.

"We have kept in real close touch with [City Assessor] Darrell Lovell who has just completed a quadrennial reassessment of all parcels in the city. We do this to maintain a handle on what we can expect from property taxes and many people might be surprised to hear that property values will be up." The property taxes we pay next summer are based on property values this year and so far the feared and anticipated collapse in local property values has yet to be experienced. Goddard continued, "…and sales tax revenues have maintained steady so far this year as well so our revenue projections for the next fiscal year won’t be nearly as bleak as most assume."

"It is important for people to realize that it isn’t an accident that we are in better financial shape than many suppose. My budget philosophy is that when things are good you must plan for the certainty that bad economic times will follow. We invested in a range of capital projects when times were good and the money was available because you simply can’t do those types of things in a tough economy. We also established and funded our replacement funds to insure that the cost of new equipment is spread over a period of years. If Galesburg goes into a period of challenging economic times we will be in a good position to weather the storm because of the measures we took when times were better. The fiscal policy we have been following should help smooth out the bad stretch."

In light of his philosophy Goddard promises that next year’s budget will have almost no locally funded capital projects excepting the continuation of those already in process. Many visible projects, such as street repairs, will continue to be completed because much of their funding is from sources external to the city. Goddard also points out another benefit to the city building up its fund balances when money was available. "You need to have funds available to permit you to take advantage of opportunities that present themselves from outside funding sources. Nearly all of these will necessitate some form of local match to access the dollars and without the available funds you lose out."

Goddard noted that the City Council has already been asked to prioritize spending for the coming years. "They were asked to rank a variety of items from absolute necessity to nice but not essential. The staff and I carefully looked over the summarized findings and are using it to prioritize our own budget preparation. If cuts need to be made they won’t be from items deemed essential by the City Council and we will work to maintain the city services our residents have come to expect."

Goddard’s optimism is probably well founded. Two-thirds of the current employees of Maytag do not live in Galesburg and a good number of those who do may be able to take retirement. The biggest unknown is what new forms of employment will pick up the slack. Invariable a number of the Maytag employees, as well as those employed by smaller local firms whose own futures are tied to the Maytag plant, will leave the city but the population loss may not be as great as many fear.

One Galesburger who doesn’t plan to leave anytime soon is Goddard. "When I retire I fully expect to continue calling Galesburg my home. I love my loft and I’m not ready to give that up. I will most likely pursue opportunities to serves as interim City Manager after I retire, but only for short periods of time. I love what I do and I am sure that a few stints as an interim manager might be fun as well as challenging."