Effingham Daily News, Effingham, IL

Local News

May 8, 2013

State of the City Mayor touts economic development, says city will need to focus on medical, pension costs

Mayor Merv Gillenwater is confident about the future of Effingham and hopes for continued cooperation from the state of Illinois as the city advances in its economic development.

“Effingham … did get hit by the 2008 recession,” Gillenwater said at Tuesday's annual State of the City Address. “However … we have been able to maintain our stability and are in better shape than many other communities within the area.”The 1 percent sales tax revenue for Effingham is fourth in the state in sales tax revenue compared to the 19 total Illinois cities who have a local sales tax.“Though the increases have been small, our 1 percent sales tax has been slowly increasing,” Gillenwater said. “Receipts to date for Fiscal Year 2013 show an approximate 1 percent increase over last year.”Outstanding debt for the city was approximately $18 million in the same year, mostly due to vehicle purchases and capital improvements.“Like the state, there are two major financial issues which are of growing concern to the city: pensions and medical costs,” Gillenwater said. “... It is anticipated that the medical claims will come close to or even exceed $2 million for the first time.”He credited the city for avoiding outstanding debts in pension and medical costs, but said the city still sees these costs rising at a non-sustainable rate.The city's portion of employee health care benefits have reached approximately 4 percent of the operating budget, while annual expenses for employee pensions are about 3 percent of the same budget.“Another major issue of interest to many people is economic development,” the mayor continued. “Effingham City has a very competent, aggressive and proactive economic development team.”He cited Midland States Bank, Patterson Companies, First National Bank of Dieterich, Heartland Dental and St. Anthony's Memorial Hospital as businesses and organizations that are purchasing, renovating and building within the city limits, and some are able to “create numerous new jobs” in the process.Complaints about the city's perceived lack of effort to attract industrial or blue-collar jobs were also addressed.“Our low unemployment rate and lack of skilled work force sometimes work against us,” Gillenwater said. “We have even been told by some of our current manufacturers that they find it difficult to find enough well-qualified workers.”He went on to say that Effingham is working with businesses, high schools and Lake Land College to address both concerns and pointed out that Effingham School District received $150,000 for the vocational trades program, while the local college received $50,000 for its industrial occupations lab, both complements of the City of Effingham in Fiscal Year 2013. However, the city has discussed possibly giving less next year as revenues tighten.The south side of the city was also addressed, as Gillenwater hears complaints that not enough is done to entice businesses to set up shop there.“The City Council and administration work hard to improve that area,” he said. “One of our major problems is that most retail businesses want to locate to the high-traffic areas ... Few are interested.”He reported on businesses that had taken up residence in the southern part of the city in 2011 and 2012 and others that are renovating in the area.Gillenwater also touched on the Effingham Fire Department, which saw a reduction in staff, with a current total of 15 full-time and 19 paid-on-call personnel. Service calls went down as well, from 531 to 483.The average response time was five minutes and nine seconds, “with response time being four minutes or less for 63 percent of the calls,” he said.The Effingham Police Department retained 22 full-time, sworn officers and seven part-time officers in 2012.Drug cases handled by the Drug Investigations Unit were down over the previous year, as were drug, cash and vehicle seizures.Infrastructure is a special concern of the mayor's.“Infrastructure improvements have always been one of my priorities,” Gillenwater said. “... I stressed how important I believe addressing our aging infrastructure is. Building new buildings, roads, water lines and sewer lines is great, and I believe we should continue to grow. However, I believe that repairing and upgrading what we already have may be of equal or even greater importance.”He commented on the improvements made to the downtown area, including sidewalks, crosswalks and lighting. Sidewalks and roadways were replaced in great numbers: 21,000 feet and 5,500 linear feet, respectively, were resurfaced.Gillenwater expects to face more financial problems, but is confident the city will continue to do well.“Until the state addresses its financial problems, we will continue to have to be concerned with how what they do will affect our city... We must continue to maintain our conservative attitude in regard to spending.”He said the Effingham area is unique in its “caring, interested, involved and supportive citizens.”“Effingham is a progressive city, and I foresee us continuing to move forward.”

Nicole Dominique can be reached at 217-347-7151, ext. 138, or at nicole.dominique@effinghamdailynews.com.

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