Forest Park commissioners approved the village’s budget for the 2025 fiscal year July 22 with an estimated $9 million deficit.
The village council approved the spending of nearly $73 million as part of the village’s annual appropriations, which establishes legal spending limits for the village, often in higher amounts than what is listed in the village’s proposed budget so that the village has authority to use that money.
The appropriations passed unanimously among Mayor Rory Hoskins and all four village commissioners who attended the meeting.
The village has been running in a deficit for years – that figure stood at about $11 million at the end of 2024’s fiscal year on April 30.
“I don’t want people to just hear doom and gloom, we have no money,” Village Administrator Rachell Entler in an early-July budget meeting. “I’m not afraid to tackle this. It is what’s been handed to us.”
Entler’s goal, seemingly shared by the rest of village staff, is to slowly improve Forest Park’s finances year-after-year.
The village may be on its way to just that, as officials have found ways to shrink the deficit from the end of the 2024 fiscal year by about $2 million.
A deficit occurs when spending surpasses income, and the village accesses its general fund as a form of revenue.
Factors that have led to Forest Park’s deficit include infrastructure improvement projects, which are funded out of the water fund and restricted funds. While individual departments have stayed under budget for several years, the village overspends in funding capital projects and emergency infrastructure repairs, plus paying employees overtime, according to Entler.
The village’s general and water funds are used for day-to-day operations, while all other funds are restricted or assigned. The general fund consists of money from property, state and utility taxes, license and permit fees, plus grants. The water fund covers the cost of running water throughout the village.
The general and water fund salaries have up to an 8% allowance for overages to account for contract benefits, overtime and retirement. Operating expenditures have up to a 50% allowance for maintenance and repairs. The same amount is allocated for grants and capital expenses.
Amid the village’s deficit, taxes will increase slightly in the 2025 fiscal year. It’s unclear exactly how much, since the village presents a levy to Cook County, which officially sets it.
“We have to do our best estimate at what we expect to see come in from our property tax,” said Finance Director Letitia Olmsted during the budget meeting in early July.
At the end of 2024, property taxes are projected to make up 28% of the village’s revenue. The 2025 fiscal year is budgeted with 3% more revenue than last year, or $159,620, all coming from property taxes.
But this increase still won’t be enough to offset the deficit — or the village’s pension obligations, which also pose a challenge when it comes to getting Forest Park into a more positive financial situation.
“By 2040 the pension funds are supposed to be 90% funded,” Olmsted said. But Forest Park’s pension is about 35% funded. “It’s a serious issue,” Olmsted added.
Once the village sees more revenue coming in from other funding sources, Entler said the village council will meet to decide how much should go toward pension funds.
A path out of the red
Entler had organized a series of budget workshops for village staff ahead of the council approval of appropriations. This marks the first time there’s been such discussions with staff, rather than one meeting where department heads present itemized costs, then submit individual budgets to Olmsted.
The first budget meeting in March outlined each department’s wants and needs. The second meeting in April organized these items by cost and priority.
“There’s really not a lot of things that we can kind of cut from our budget without having to cut services,” Entler said.
So far, the village has increased its liquor license fees and, according to Entler, is looking at also raising fees in multiple departments, many of which haven’t increased for decades.
Entler said Olmsted is exploring what it would take to implement a places-of-eating tax. This would likely establish a 1% or 2% tax at restaurants and fast-food spots, generating $500,000 to $1 million for the village, Entler estimated.
The village now projects to end the calendar year with a loss and reduction in its fund balance. This will continue a pattern over a decade long, where Forest Park’s revenues have not offset its expenditures.
“We’re going to continue looking at how we can be more efficient at the things that we do,” Entler said.
Correction, July 26, 2024, 10 a.m.: An earlier version of this article incorrectly stated that the village pays pensions out of its TIF funds. While the village borrows money from the TIF funds to meet financial obligations, it was not specified that this money goes towards pensions. The story has been corrected, and we apologize for the error.