Park Forest, IL–(ENEWSPF)– Village officials met on Saturday for a Strategic Planning session that included a financial update from each department. Officials discussed some of the impacts of the current recession, focusing in part on revenue shortfalls and expenditure increases in the current budget totaling $694,643.
While that figure is formidable, officials will be able to close the budget gap by using money already in the General Fund. Park Forest ended the last fiscal year with approximately $800,000 more in the General Fund than is needed to maintain a three-month reserve. Given the current economic climate, the Village Board made the decision to not spend the funds.
That decision is paying off. Part of the surplus in the General Fund will be used to address these items.
According to Mary Dankowski, Deputy Village Manager and Finance Director, the budget shortfalls are showing in areas that are directly impacted by the recession. Real Estate Transfer Taxes are tracking $100,000 lower than last year at this time, and are expected to end $150,000 below budget, according to Dankowski. The number of permits issued is also down. This category includes building permits, which are tracking lower than budget and are anticipated to fall $40,000 below target.
In addition to these, Utility Taxes are tracking lower than budget at 46% in cash collections, and State Income Tax receipts are also tracking below budget at 46%.
Charges for Services include Health Department revenues which reflect a lag in Medicare receipts. Hospital transport charges are running below budget and are anticipated to end the year $45,000 below projections.
These major areas will result in a combined loss in revenue of $235,000.
The Village is also seeing a need for an increase in expenditures in areas also affected by the economy. Premiums for the Illinois Risk Management Association, or IRMA, are tracking $90,143 over budget, and IRMA litigation expenses are $87,500 over budget. The Village also incurred legal costs of $82,000. Finally, road salt is tracking $200,000 over budget for this fiscal year.
Police and Fire Pension Funds are also taking a hit. As of June 30, 2008, the value of the Police Pension Fund was $16,642,011. By December 31, 2008, the value of the fund was $16,011,532, representing a loss of $630,479, or 4%. The Fire Pension Fund stood at $8,876,451 as of June 30, 2008. By December 31, 2008 its value had declined to $8,473,902, a loss in value of $402,549, or 5%.
The Village also received notification that the Illinois Municipal Retirement Fund experienced a 25.9% investment loss for 2008. This means that the IMRF funding level went from 100% in 2007 to 69.7% by the end of 2008. Because of reduced investment returns, the IMRF employer rate increased to 6.79% in 2004, 8.06% in 2005, and 9.21% in 2006. In 2007, rates decreased slightly to 8.79% and further declined 8.54% for 2008. In 2009, rates increased to 8.69%. The investment losses of 2008 will impact the contribution rate and levy needs for 2010. Based on information received so far, rates could increase from 8.69% to 10%. This increase will cost the Village of Park Forest an additional $84,000, representing 0.8% levy increase for IMRF alone.
With a 4% loss in asset value in the police pension, the increase in levy needs could exceed $125,000 or an additional 1.2% levy increase for 2009. Because of losses in the fire pension, the 2009 increase could be as much as $60,000, an additional 0.6% levy increase, according to Dankowski.
This means the levy increase for 2009 related only to pension funds could be as high as $269,000, or 2.6%.
The Good News
The news was not all bleak on Saturday. There are some economic development initiatives that are currently underway in Park Forest that will have potential positive impacts. These include Orchard Fresh Market, scheduled to open March 1, which will bring jobs and more sales tax to the Village. The State of Illinois Food Service, scheduled to move into the Orchard Plaza, will bring about 60 new jobs. The Village is also working on the sale of Chase Bank, which will put that building back on the tax rolls and also bring a potential new parking lot to the downtown area. And, while in a TIF district, Norwood Square is already back on the tax rolls, and further development of that plaza will also show an increase in sales tax generation.
Scaling Back on Capital Projects
The Village has also been forced to defer some capital projects. The 2008/2009 Capital Plan called for $224,900 in the Recreation and Parks Department. Only $34,400 was budgeted, a savings of $190,500. In Buildings and Grounds, $255,500 was in the Capital Plan, but only $60,000 was budgeted, a savings of $195,500.
In the Police Department, the 2008/2009 Capital Plan included $820,300, but only $70,300 made its way into the 2008/2009 budget. The major project still on hold for the Police Department is an expansion of the detention facility to house serious juvenile offenders. Currently, the Park Forest Police Department has a two-jail cell lock-up that was built in the early 1950s. Each cell has the capacity to hold two adult prisoners for a total capacity of four persons. According to Police Chief Tom Fleming, the existing cell plumbing experiences frequent breakdowns and some flooding. The cells also do not comply with Juvenile Justice Standards to house serious juvenile offenders. The lock-up facility which was built 60 years ago will not house the number of persons who are currently detained on a daily/yearly basis. Their proposed 2700-square-foot detention addition to the current police station is sorely needed, according to Fleming.
The Fire Department also scaled back. The department had proposed $54,180 in its 2008/2009 Capital Plan, but budgeted $50,280, a difference of $3900. Community Development sought $22,200 in its capital plan, but budgeted zero dollars. Likewise, Economic Development and Planning sought $2500, but budgeted zero dollars. The Health Department sought $41,400 in capital improvements. Only $5000 made its way into the 2008/2009 budget. Administration sought $72,400 in capital items, but $79,300 made its way into the budget, an increase of $6900. The largest increase was in Public Works, which had $373,100 written into its capital plan for the current fiscal year, but budgeted $629,290, an increase of $256,190. Much of this increase can be attributed to road salt, already noted.
The total capital items sought by each department in the capital plan were $1,866,480, but only $928,570 made their way into budget, a savings of $937,910.
Saturday’s meeting ran from 8:30 a.m. until just after 2:00 p.m. The Village Board will meet again on February 23 at 8:00 p.m. in Village Hall.
The writer is a Village Trustee in Park Forest.