One of the reasons North Riverside trustees are faced with such a daunting operating deficit in their 2011-12 proposed budget – almost $2.2 million – is that it has deferred contributions to its police and fire pension funds for each of the past three fiscal years.
The most recent financial village audit states that as of April 30, 2009 – two full years ago – police pensions were 52.9 percent funded while fire pension funding has dropped to 56.2 percent.
According to Finance Director Sue Scarpiniti, the village’s scheduled pension contribution for 2011-12, included in the budget trustees are considering, is about $1.5 million. Of that figure, $920,000 is owed to the police pension fund this year, while the fire pension fund is owed $550,000.
Her recommendation is to make the contribution. If trustees choose to do that, they are going to have to come up with a raft of cuts to a budget that has been slashed in each of the past two years.
There are options. The board can again choose not to make a contribution to the pension fund, further deferring that obligation and delaying the inevitable, or it can choose to make a partial contribution.
The board did not address pension contributions at either of its two budget workshops last week.
But Scarpiniti, in a separate interview on June 16, said she’ll recommend a partial solution at the next budget workshop, which is slated for June 28.
Scarpiniti said the village board has the authority to levy the fire pension obligation separately from line items limited by tax cap laws. The levy increase, she said, can be made without going for a referendum.
Levying $550,000 in one fell swoop would have a noticeable impact on the village’s portion of the property tax bill. Such a move would increase the average tax bill by about two-thirds, said Scarpiniti.
Between the annual levy for operations and for debt service, North Riverside collects about $750,000 in property taxes to fund an operating budget of about $12 million. The vast majority of revenue in North Riverside (some $9.4 million in 2010-11) comes via sales taxes.
Adding $550,000 to the levy would mean that the average homeowner would pay about $100 more in property taxes for the village.
As for a general property tax referendum? It’s not a popular solution.
“A property tax referendum has been looked at by village staff,” said Scarpiniti. “We looked at it as another potential source of revenue, but there’s been a lot of resistance from the board.”
– Bob Uphues