Finance Director: Village's Future Finances Not as Dire as Forecast Seems

The recent five-year projection of the Village of Glen Ellyn's finances may seem alarming but Finance Director Kevin Wachtel wants residents to see the big picture.

"If you look at it in and of itself it looks dire and I don't necessarily think that's going to happen. It's a picture, it's a snapshot to say, 'OK we've got to keep this in mind, let's continue to look at ways that we can provide services to the community in the most cost-effective way that we can." 

The Finance Commission forecasted expenditures and revenues for the next five years based on historical growth, the current economy, and current budget information. Based on these components the forecast shows a budget shortfall of $13 million at the end of fiscal year 2017 with an annual deficit of $2.6 million if no corrective action is taken. Contrary to the projection for this current fiscal year, which estimates a $2.6 million shortfall, Wachtel's current budget expects a surplus of $147,000, far from the projected shortfall.  

Thanks to recent state legislation for police pensions and less health insurance claims this past fiscal year, the village is expected to report a surplus. All this, Watchel says is a sign that the five-year forecast is one device to help craft a sound fiscal plan. 

"I look at the five-year forecast as a planning tool and a management tool to understand the long-term pressures that we're facing at the village."

Overall, the forecasting shows village expenditures growing faster than future revenues. Wachtel and his team identified these large expense drivers (pensions and health insurance costs) and are working the numbers to see what policy adjustments can be made to accommodate for these large expense drivers.

"It identifies those as issues and trends and things that we've got to be cognizant of so that we're not recommending or having policy that will make those problems worse."

Trustee Pete Ladesic is critical of the village's budget and feels more, deeper cuts can be made to realize even more savings. Ladesic says, the village-operated ambulance services needs a second-look because it might be cheaper to contract out, and he thinks there's too many clerical staffers. Ladesic said keeping too many on staff ultimately means adding more strain to the biggest expense driver in Glen Ellyn--pensions. However, Glen Ellyn has the lowest use of full-time staffers, according to the forecast report.  

"These are tough times, I don't want to be responsible for anybody losing their job but unfortunately that's what I was elected to do -- to make tough decisions," said Ladesic.

The five-year forecast recommends a few solutions to steer the budget away from the projected shortfall. The five-year forecast encourages the village to consider controlling salary increases, along with evaluating the need for providing certain services. The report encourages the village to utilize part-time employees whenever possible to contain costs. And it seems the village is on track, while preparing the 2012-2013 budget, the village decided to terminate the village forester position and divide those responsbilities among several public works employees. The village also brought the Economic Development Corporation in-house, and is seeking to hire an economic development manager. 

While some expenditures and revenues are driven by factors beyond the village's control, Wachtel says the village is making a big push to bolster the sales tax environment and economic development throughout Glen Ellyn to help improve revenues. 

"We can't do nothing, not that we would do that anyway. Our revenues do not grow as fast as our expense drivers that's just the environemnt that we're in," said Wachtel.