Village Board Contemplates New Approach to Upcoming Budget

Trustees are looking at ways to address budget shortfalls and potential revenue sources as they start the process of putting together the fiscal 2013 budget.

The  is facing a projected $2.85 million deficit.

Trustees discussed a "guiding principles" document, created by Trustee Rich Sustich, at Monday night's meeting. The principles aim to help structure the village’s budget approach to address shortfalls, department priorities and possible revenue sources. 

The document stipulates that the budget “is presented in an easily understood and transparent manner” that it is sustainable and preserves village assets. The "guiding principles" also specify that the budget deal with “the anticipated overall budget deficit of $2.85 million forecasted by former Finance Director (Al Zochowski) December 5, 2011.”

In the document, Sustich also stated that each village revenue source should be explicitly identified, that the budget not rely on new revenue sources such as the  and that the village not count on extending the utility tax after its promised sunset in June.

That latter stipulation spurred discussion among trustees.

“I don’t want to be locked in to an absolute of sunsetting the utility tax if we encounter revenue issues in the future,” said Trustee Terry Mastandrea.

“My personal stance on the utility tax — it was a commitment that if (residents) passed the NHRST, we would sunset the utility tax in June. We need to hold true to the commitment made to the community,” said Trustee Jonathan Sprawka.

Trustees also addressed appropriate uses of the non-home rule sales tax funds.

“I feel that the document is a little too strict relating to NHRST funds. They are to be used for capital improvements such as road paving, but according to the document, the funds couldn’t be used because they don’t affect public health,” said Trustee Dana Rzeznik.

Another part of the document spells out how activities and expenditures should be prioritized in order of importance: protection of human health; preservation of private and public assets; enhancing quality of life; and all other activities and expenditures.

“This relates to all revenues and expenditures under the general fund, which is the only place for discretion opportunities,” said Sustich. “We need to ask ourselves, ‘If we don’t do this, what would the result be?’ ”

Other recommendations include that the budget be balanced so projected revenues are equal to or larger than expenditures, and that it meet statutory, regulatory and contractual obligations.

Upholding union contract obligations, including properly funding police and fire pensions, are included in the guiding principles, Sustich said.  

"Regarding those mandates, we should make that attempt but we may not be able to right away," said Village Attorney Carlos Arevalo.

For years, previous administrations had underfunded police and fire pensions, though in fiscal 2012, the .

“I’m concerned that we may end up putting ourselves in a box that we don’t even realize at this point. I want to know if we can adopt this and leave ourselves a little room if something comes up in the future, such as unfunded mandates,” said Mayor Suzanne Branding.

Other guiding principles stated that in the future, the budget progress would be reported monthly to the board, and that any changes made to the approved budget also would be approved in advance of implementation.  

Trustees agreed to revisit the guidelines for their formal adoption as a resolution at the Jan. 30 board meeting.

“We are at the point that we must look at everything we have to do to address that $2.85 million shortfall,” said Sustich.

According to state statute, the final budget must be approved by April 30.

Budget Director Hired

In other news, the village board agreed to hire a temporary budget director.

The interim budget director will be Douglas Ellsworth from Deerfield-based Gov Temps USA. The amount approved by the village board to cover the cost of the temporary hire is $45,000 for five months. Ellsworth will begin Jan. 19 and his contract runs through May 4.

“This is a temporary appointment for budget director, not a permanent one — which we are in an active recruitment phase for the next couple of weeks,” said Roy Witherow, assistant village administrator.