The Village of Riverside is expected to take in slightly more in revenues than it will spend in 2006 for general operations, and should repeat that effort in 2007. But by 2009, the village will be facing some hard decisions regarding personnel and services if revenues don’t increase.
Village trustees, administration and department heads got their first extended look at the 2007 budget on Oct. 21 at the village’s annual budget workshop. In general, the village’s financial position remains strong, with Riverside’s general operating fund balance still well above the benchmark the board has set for that fund.
At the end of 2006, general fund revenues are expected to increase $11,000 over the end of 2005. In 2005, the village’s general fund reserve took a nearly $1 million hit as reserves were used for the restoration of the village’s downtown water tower.
In 2007, the general fund balance is expected to increase modestly by some $24,000. But balancing the budget for 2007 will be done by cutting nearly $320,000 from spending requested by various departments in the village. Except for personnel costs, all other expenditures are expected to be lower in 2007 than they were in 2006, including cuts in contractual services, supplies and capital purchases.
While the village could continue to make cuts to such areas in the future, by 2009 the cuts will need to be more dramatic to keep revenues above expenditures in the general fund, which pays for the day-to-day operations of the village.
“You don’t want to be in a position where you’re cutting $300,000 in requests every year,” said Kevin Wachtel, Riverside’s finance director. “At some point those cuts are out of the budget. Then it becomes real services being cut.”
Riverside officials are already contemplating some service cuts that will be mostly invisible to residents, but are service cuts nonetheless.
In 2007, public works crews will limit street sweeping in the downtown business district to once a week, rather than twice a week. The Public Works department will also cut a summer seasonal position and do mowing in park areas every three-and-a-half weeks rather than every two-and-a-half weeks.
In another cost-saving measure, Riverside will change its vehicle replacement policy for the police department. Instead of replacing squad cars after two years, the department will purchase one additional vehicle in 2007 and then replace vehicles every three years. That move alone will save the village roughly $15,000 per year, according to Wachtel.
Trustees also discussed the possibility of imposing a restaurant tax, amusement tax and cigarette tax, ultimately deciding against the first two for the time being. While a restaurant tax, in which 1-percent tax would be passed along to restaurant patrons on the bill, could have brought in $25,000 to $30,000, trustees felt that now was the wrong time to impose the tax.
“Right now the restaurant situation is too much in flux,” said Trustee Kevin Smith. “I’d like to see where the trend is going with restaurants.”
The village has just one business, a video store, where an amusement tax could be levied. A cigarette tax, which would bring in one penny per pack, was the only tax trustees agreed to impose, unless it would cost more in village staff time to administer it.
Wachtel estimated that in 2007, property tax revenues collected for village government purposes would rise by 3 percent in 2007 but that overall revenue would increase by just more than 2 percent. Meanwhile, personnel costs are expected to rise by just over 7 percent in 2007. Personnel costs account for roughly 60 percent of expenditures in the general fund. As a result, the village has projected cutting operational spending by almost 5.5 percent and is planning to reduce capital expenditures by 13 percent over 2006 levels.
“Either we find sources of revenue or ultimately services are going to have to be reduced at some level,” said Wachtel during his presentation of the preliminary budget on Oct. 21. “That’s the message going into 2008. We’re going to have to deal with that.”
Riverside will hold a public hearing on the final budget numbers at a Dec. 4 meeting of the Board of Trustees. The board will adopt the 2007 budget at its Dec. 18 meeting.
