ROCHELLE — Efficiency in operations and controlling costs are two of the top priorities for Jeff Fiegenschuh, Rochelle’s new city manager.
Another task at hand is finding ways to bridge the budget gap without relying on transfers from the landfill fund. At Monday evening’s council meeting, Fiegenschuh presented an option to help meet these goals.
One of the items on the agenda was a resolution to direct all street lighting costs to be assumed by Rochelle Municipal Utilities and be removed as an expense of the general fund.
“Shortly after being hired I began looking into ways of solving the budget problems,” Fiegenschuh explained. “One of the things I found involved RMU billing the general fund for the street lighting costs.”
Currently there is a levy in place with a maximum of $.05/$100 EAV that generates $110,000 each year. The billing cost to the general fund associated with street lighting last year was about $155,000, with the remainder coming from the Motor Fuel Tax and the general levy.
After further research, Fiegenschuh discovered more than 80 percent of the communities surveyed that have their own utilities classify this expense as a cost of doing business.
At the council meeting, Fiegenschuh suggested the money levied could either be utilized elsewhere, such as pension costs or general property insurance costs, or simply eliminate the levy altogether.
“What I wanted to reassure everybody is we are not transferring money out of the electrical department or the electrical fund to the general fund,” Fiegenschuh added. “The reason I am proposing this isn’t a budget gimmick, it just seems to me one of the benefits of owning your own electric utility is covering some of those costs and then allowing the general fund to focus more of its resources to what it needs like pension and public safety costs.”
Before coming to a vote, Fiegenschuh added that if council voted to approve the resolution, the write off would begin in January.
Council voted unanimously to approve the resolution.
Health insurance
Along the same lines to cut operating costs, Fiegenshuh also suggested council consider combining with a health benefits cooperative to save costs — something the city of Rantoul, Illinois did during his employment there. By joining a larger pool of employees covered under health insurance, Rantoul’s premiums were 25 percent lower and first year renewals were in single digits.

“This was the first time in multiple years [Rantoul] saw renewals of less than 10 percent. Part of this can be attributed to joining the sub pool and increasing our lives covered from 120 to 400,” Fiegenshuh said of his former employer’s health insurance costs. “Essentially we broadened and leveraged our risk.”
Based on numbers provided, the City of Rochelle’s renewal rate will drop from 7.6 percent to 3.1 percent, and there would be no change in coverage for city employees.
Other communities already as members of the Quad Cities Health Insurance Pool Sub-Pool include East Moline, Princeton, Colona, Lee County and Washington.
Council approved the resolution to accept the membership as a member of the sub-pool.
Priorities
As he finds ways to control operating expenses and increase efficiency, Fiegenschuh said he is also aware of citizens’ concerns regarding utility rates.
“As a municipal utility we need to cover our costs, make sure we generate enough revenue to cover depreciation costs and reinvest back into our infrastructure — but we want to be as cost effective as possible,” Fiegenschuh stated. “The hope is that we are as cost effective or have a lower rate than those in the private side. One of my priorities is going to be if we need rate increases we will do it, but we need to do it in ways that don’t adversely affect our customers too much. We want to ensure we are as competitive as possible with the investor owned utilities.”
Although increases are unavoidable, Fiegenschuh said it is important to keep them controlled.
He also talked about property taxes, which is a concern for many across the state. Fiegenschuh said moving forward if there are inevitable cost increases the city will need to pursue all available avenues, including cutting costs elsewhere.
One option is a centralized purchasing system to get better rates on equipment and supplies.
“We certainly want to make sure we are not just going to that well and saying we need to raise the levy because we have those expenses,” Fiegenschuh said. “One of the philosophies I have adopted during the great recession is it’s the little things that matter… cutting costs such as decreasing cell phones, land lines and fax lines. Those ended up saving $40,000 to $50,000 a year. That’s real money and that’s somebody’s job. So, it’s easy to say I don’t want to raise the tax rate and sometimes you have to do it, but I want to make sure we are looking at all of the efficiencies we can, so that’s always the last resort.”
Fiegenschuh also discussed early retirement and early separation incentives along with vacant positions that might not need to be filled.
Although the money is in the budget for those positions, Fiegenschuh said the city’s leaders will contemplate necessity or possibly combining those duties with other positions.
“I’m not looking at layoffs, we are not going to lay anybody off. But if we can have people take early retirement or if people move on, we need to seriously look at the position,” Fiegenschuh said.
On the flipside, Fiegenschuh knows this might mean less services, although none in the “front line public safety” positions. It’s a fine line municipalities across the country must deal with as costs increase.
“We are looking at how we can be more efficient in our operations and controlling costs,” Fiegenschuh said. “Those are my top priorities.”
Tax base
Another item of importance is attracting more businesses to Rochelle thereby increasing the tax base and sales tax revenue.
“We have a really good economic development director. We need to keep pushing for economic growth in the community,” Fiegenschuh said. “We need to focus on the downtown to get revitalization going and getting more businesses down there. It all plays hand and hand in my opinion.”