With a razor thin margin of $28,900, village officials termed the proposed budget for the new fiscal year as a lean and balanced spending plan that allows little room for error.
The numbers were unveiled to commissioners and the public at a May 28 hearing, but before the elected officials could delve into the nitty-gritty of each department there was an acerbic discussion on Forest Park’s financial well being. Commissioner Marty Tellalian found himself at odds with Mayor Anthony Calderone over how much money the village should be keeping in its reserves. Tellalian, lobbying for a heftier savings account, said Forest Park is not going to achieve such security with budgets such as the one being presented.
After meeting with department heads to craft a spending plan, Village Administrator Mike Sturino pitched spending $21,591,865 in the new fiscal year. That figure draws almost even with the projected $21,620,830 in projected revenue.
“I think we’re going to run a generally balanced budget,” Sturino said. He described the revenue estimates as “pretty conservative,” which could bring the village a healthier year-end balance than what is being outlined.
In calling for a strategy that will move Forest Park toward a cash reserve balance equal to three months worth of expenses, Tellalian leaned on recommendations made in a recent audit report. The village currently has enough cash on hand to operate for roughly 45 days.
Calderone, however, pointed out that in at least the last four years the village has not had the level of reserves being championed by Tellalian. Furthermore, he called the benchmark an “arbitrary” standard and said Forest Park has “unequivocally” served its residents well without having such reserves.
“So it’s really not that the sky is falling,” Calderone said.
At the close of the fiscal year on April 30, Forest Park was operating with a budget deficit in excess of $1.6 million. At one point, money was shifted from a capital improvement budget to help cover expenses. Those funds have since been repaid.
Additional revenues are expected to reduce that figure to $711,500, according to a spreadsheet presented to the council at the budget hearing. In fiscal year 2007, Forest Park ended the year with a deficit of roughly $88,000.
“I guess we need a new auditor if that three months [worth of reserves] is not a good idea,” Tellalian said.
The revenue projection for the 2009 budget represents a mere 0.2 percent increase over what the village expected to receive in various taxes and fees for fiscal year 2008. However, a downturn in the national economy has been blamed in large part for Forest Park taking in only $18.7 million as of April 30.
Using a readjusted revenue projection for fiscal year 2008, the $21.6 million anticipated in 2009 represents a 7.7 percent increase over the previous year.
The $21.5 million in budgeted expenses represents a slight increase over last year’s budgeted amount by 1.5 percent. Compared to what was actually spent in fiscal year 2008 – which was cut to compensate for revenue shortfalls – the proposal marks a 3.9 percent increase.
State law dictates that Forest Park must adopt its annual budget within the first three months of the fiscal year. No action was taken at the hearing.