(Publisher’s note: In recent issues, the Review has referenced a deficit being run by the village government in monthly financial statements over the winter months. While factually correct, a month end statement is not a useful method of assessing the broader financial picture of an organization. That snapshot is simply too narrow. In conversations with Village Administrator Tim Gillian he accurately made the point that the monthly shortfalls would be offset when property taxes and sales tax revenues were eventually received from the county and state respectively. The Review offered Gillian this space to explain his points in more detail.
We apologize for overemphasizing the month end financial results and are pleased to publish Gillian’s response. However, like most every municipality, Forest Park’s overall finances remain challenging. As Mayor Anthony Calderone said in his endorsement interview with the Review last week, “Village finances have been tight for several years.” Our goal going forward is to more accurately report those challenges without overstating them. –Dan Haley, publisher)
I was invited by this paper to write a column in an effort to clear up some confusion that exists concerning the Village of Forest Park’s finances. With that invitation, Mr. (Dan) Haley the publisher of the Review acknowledged that recent coverage of the financial picture of the village may have been misunderstood, and therefore, misstated. I appreciate the ability to set the record straight and applaud the Forest Park Review and its publisher for the opportunity.
First let me explain the one time payments from the YMCA and the Roos project. The Oak Park YMCA entered into a contract with the village to purchase the Altenheim property which subsequently fell through. The YMCA initially provided earnest money for the purchase and paid the village monthly payments during the long process. When they were unable to complete the purchase the earnest money and monthly payments were kept by the village pursuant to the agreement. As a result, the YMCA forfeited $292,000 to the village. With respect to the Roos project, the developer gave the village an irrevocable Letter of Credit for $525,000 to be used for infrastructure improvements in the area of the development. When the developer failed to complete the project the village garnered $525,000 and because those monies haven’t been committed to any project, it is kept as reserve cash and is considered deferred revenue by the auditors. In the simplest of terms, the village has not accounted for it as revenue so it hasn’t had any impact on our financial condition.
The village’s fiscal year begins May 1 annually. The 2010 fiscal calendar ran from May 1, 2009 through April 30, 2010. The final audited statement for fiscal 2010 showed a surplus in the three major funds of $230,033. The money from the YMCA was income in the 2009 fiscal year and therefore did not contribute to the surplus. The Roos money is audited as deferred revenue and did not contribute to the positive 2010 results. It is our intention to continue holding the Roos money as deferred revenue and as such it will have no impact on the projected surplus for fiscal 2011.
It should be noted however that the infusion of cash from the YMCA and Roos has indeed helped the village with short-term cash flow while we wait for the state income taxes and the property taxes to come in, both of which are very late this year. This is perhaps the reason for the confusion surrounding our finances. In two recent headlines the Forest Park Review has proclaimed that the village is “running at” or “facing” a 2.1 million dollar deficit. It is not unusual for government or businesses in general to use alternate cash available in order to cover operating expenses until the guaranteed revenues are received. After the end of the fiscal year when all the revenues and expenses are known and recorded, the true excess or deficit is known. When the final audit for 2011 is completed, we anticipate a surplus for the three funds in excess of $400,000.
In closing I would like to thank the Forest Park Review for the opportunity to address some of the questions the community may have after the recent articles. I have prepared this article in collaboration with Finance Director Judy Kovacs and we are both confident of and stand by the statements made.
Tim Gillian is the village administrator of Forest Park.