Prepping for a barebones budget

At the village council’s budget workshop last week, Village Administrator Tim Gillian unveiled the outlines of what he calls a barebones village budget. His projected budget would, if the projections are correct, result in a surplus of $123,600 in what remains a difficult economic environment. However, that surplus would be achieved only by deferring the payment of $375,948 to the police and fire pension funds, which are underfunded because of poor investment returns in recent years.

Gillian also recommended that the village council increase vehicle sticker fees by $5 in each of the next two years, starting in January. It currently costs $25 for a village vehicle sticker for a passenger car. Senior citizens now pay $3 for a vehicle sticker.

Gillian estimated that the increase in vehicle sticker fees would raise about $30,000 in new revenue for the village. Revenue needs to be raised, Gillian said, because the village has done just about all it can do in controlling costs.

“There’s not a lot of other places that we can cut at this point,” Gillian told commissioners. “This council and future councils are going to be tasked with the tough task of raising some fees. We have to look for more ways to increase our revenue for future stability.”

The village vehicle sticker fee has not been increased since 2004.

Gillian and Mayor Anthony Calderone both described the projected budget as essentially being in balance. The projected $123,600 surplus is just pocket change in a budget of more than $21 million and could easily disappear because of extra expenses or a reduction in projected revenues.

“That’s a snowstorm or two,” Gillian said. “While we are showing a surplus, it’s not really a surplus. It’s flat at best.”

Gillian emphasized throughout his presentation that his numbers are based on projections and that the actual revenues and expenses could vary depending on how the economy does and what happens with state aid to local governments.

“The magic word is ‘projections,'” Gillian said. “Everything you see tonight is projections.”

The revenue projections do not include the money that would be raised from increasing the price of a vehicle sticker.

Gillian said that he is concerned about a proposal by Illinois Gov. Pat Quinn that would cut local government’s share of the state’s use tax. If this proposal becomes law, it could cost Forest Park $380,000.

“A town of our size cannot afford to lose such a big part of our revenue,” Gillian said.

Gillian estimated that total revenues for fiscal year 2011, which began May 1, would be $21,523.200 and total requested expenses would be $21,399,600. The projected $123,600 surplus would be 0.6 percent of expenses. Gillian estimated that village revenues would increase by $500,000, or about 2.5 percent in the new fiscal year.

“The economy’s starting to pick up,” Gillian said.

Calderone agreed with Gillian that the budget presented was essentially balanced and that the projected surplus was negligible

“$120,000 on $20 million is nothing,” Calderone said.

Gillian proposed making the village’s regular 2011 contribution of about $1.2 million to the fire and police pension funds, but deferring the contribution of $375,948 that is required to make up for the recent sub-par investment performance of the pension funds.

Gillian recommended paying the nearly $375,948 shortfall as money becomes available. What is not paid in 2011 will eventually have to be eventually paid with interest.

“I’m not in favor of allocating those funds because frankly those funds are not available today,” Gillian said. “Investment returns would reduce the amount owed and if the economy improves more funds will become available. We’re hopefully not even going to have to defer it.”

Gillian took a hard line on spending requests from department heads and he said that department heads were very restrained in their budget requests knowing that the village has to hold the line on costs.

“Each of the department heads stepped up really big and did not ask for a lot of extras,” Gillian said.

Even so, Gillian took a tough line on spending requests and cut $787,900 from the requests of department heads. Gillian nixed all but one request for new vehicles. He turned down a request for two new trucks for the Streets and Public Works Department, one request for a pickup truck from the Public Property Department and a request for a new vehicle for the Community Center.

Gillian joked that the village’s mechanic, George Prescott, has been keeping village vehicles on the road using duct tape and bailing wire.

The only non-police village staffer getting a new car is Fire Chief Steve Glinke, who is also serving as the head of the Building Department.

Glinke will be getting a new Chevrolet Tahoe, which is listed for police use at $23,942, to replace his 2000 Ford Expedition. which has had two alternators replaced in the last year and has had a lot of other repair work.

“This vehicle is mission-critical and has driving demands beyond a staff car,” Glinke said. The Expedition will stay in the village’s auto fleet and a 1998 Ford Crown Victoria will be taken out of service.

The police department will be buying two new squad cars but the funds for that will come from the department’s seizure fund which consists of assets seized from of criminals so there will be no cost to the village.

The village will realize big savings form the reorganization of the Department of Public Health and Safety, more commonly known as the Building Department. That department’s request is $150,000, or 31.7 percent, less than last year. Total wages in that department are projected to fall by $131,500 because the village replaced former director Mike Boyle, who suddenly resigned last summer, with Glinke who will also remain as fire chief essentially doing two jobs for little more than the price of one. The department is also not replacing recently retired building inspector Bob Teets.

The village is also not replacing an assistant in the public works department and an assistant in the Community Center who have left their jobs.

Calderone said that Forest Park has been able to avoid the cutbacks and layoffs that other communities have had to make.

“When you look at all of our neighboring municipalities they have all done significant layoffs,” Calderone said. “They have made other significant cuts. We haven’t had to make any sacrifices or lay anybody off. We continue to do well despite the economy.”

Calderone praised the department heads for holding the line on spending.

“They continue to cut, cut and cut,” Calderone said.

Calderone acknowledged that eventually more revenue will have to be raised to go along with holding the line on spending to maintain the village’s financial position.

“It’s most likely will be a little bit of both – a little more revenue and continued diligence on the expense side,” Calderone said.

The village council will vote on the appropriating ordinance for the budget later this month. Gillian’s entire PowerPoint presentation can be viewed on the village’s Web site.