North Riverside trustees last week agreed in principle to balancing the village’s 2011-12 budget, largely by deferring pension contributions and a transfer of operating funds to the capital projects fund and by increasing its projection for sales tax revenues.
With a deadline for passing an appropriations ordinance looming at the end of the month, trustees agreed on a combination of fee hikes, pension deferments and more in order to get closer to balancing a 2011-12 budget that showed a nearly $2.2 million operating deficit.
The village board will hold a public hearing on the budget at 7 p.m. on Monday, July 18 in the board room at North Riverside Village Commons, 2401 Desplaines Ave. After the hearing that night, the board is expected to pass its appropriations ordinance, the legal document that outlines spending during the fiscal year.
The 2011-12 fiscal year began May 1 and runs through April 30, 2012.
At a budget workshop June 28, the third held last month, trustees agreed to defer roughly $1.5 million in contributions to the village’s police and fire pension funds (see accompanying story) for the fourth straight year.
Trustees also found temporary savings by deferring until next year $272,000 in general operating funds to the capital projects fund. The village will also defer $75,000 in expenditures by not participating in a scheduled sick leave buy-back program for non-union employees and will save $38,000 this fiscal year by phasing in the purchase of police squad car cameras over two years.
North Riverside expects to save $75,000 in fire department overtime with the implementation of a new staffing policy earlier this year. The village will also save $10,000 by eliminating its leaf bag distribution program for residents.
Also helping to close the budget gap was a change in the way the village is predicting sales tax revenues in 2011-12. Initially, Finance Director Sue Scarpiniti proposed the village budget collect 97 percent of the total sales taxes collected in 2010-11. That percentage has been increased to 98.5 percent, adding $121,000 to the revenue projection for 2011-12.
Previously, the board agreed to a host of fee and license increases, adding another $91,000 in predicted revenue for this fiscal year.
Even with those changes, village department heads will still need to trim another $40,000 from the budget. That work will be done prior to the July 18 meeting.
“Our recommendation would be to have the departments go back and [have] us work with the departments to then find the remaining [money] within the operating departments,” said Scarpiniti, “and slash those budgets even further, proportionately, across all departments.”
Moving forward, however, Scarpiniti said the North Riverside board must begin coming to grips with its long-term pension issues. Pension funding is one of the most important issues for trustees to solve, she said.
“Pension funds need to be a top priority of the entire village moving forward,” Scarpiniti said. “It is $1.4 million every year and it’s going to continue to grow beyond the $1.4 million mark in future years. You can see in our projection three years from now we’re predicting that pension fund contributions are going to be in the area of $1.6 million because of the level of benefits those employees do receive, the amount of contributions coming into the fund, [and] because they are only paying a little under 10 percent of the total benefit cost. The lion’s share of the benefits are borne by the municipality.”
Illinois law states that pensions must be 90 percent funded by 2040. In addition, Scarpiniti said, there is legislation already passed by the Illinois General Assembly that will funnel state income tax contributions and other state shared taxes to pension funds first if the municipal pension funds fall below 50 percent funding by 2016.
Right now, North Riverside police pensions are funded at 54 percent, while fire pensions are funded at 58 percent, Scarpiniti said.
She also urged the village board to start their budgeting process sooner.
“What we’re proposing for the future is, with the upcoming 2013 budget, starting that process with meetings in January,” said Scarpiniti, “so departments will start their process before the holiday season … so that we have a three- or four-month period of time. And I would recommend passage of the budget before the start of the fiscal year, which is May 1.”