Buoyed by projections that show tax revenues climbing by 25.5 percent by 2015, North Riverside’s village board has decided to balance the 2012-13 budget principally through a combination of pension contribution deferments and spending down cash reserves.
At a pair of budget workshops in April, trustees settled on that strategy to close a $1.75 million hole in its 2012-13 operating budget as a bridge to a predicted rosier future with respect to sales tax receipts, the life blood of North Riverside’s finances.
Sales taxes comprise 84 percent of the village’s total tax revenue, according to Sue Scarpiniti, the village’s finance director.
Officials confidently predicted that three new restaurants would be operating in the village by next year and indicated that negotiations to bring Costco to the Edward Don property on Harlem Avenue are moving at a brisk pace.
Deals for restaurants to be located in outlots at the North Riverside Park Mall are imminent, while another is being eyed for the corner of Cermak Road and Harlem Avenue, in the spot Pearle Vision currently occupies. Pearle Vision’s lease is not being renewed and the business will vacate the property within the 2012-13 fiscal year, which began May 1.
“Those deals are underway,” said Scarpiniti, of the restaurants at the North Riverside Park Mall. “One of them is actually pretty close to being signed. Construction of those two restaurants isn’t anticipated to occur until the spring of 2013.”
One restaurant, rumored to be Red Lobster, will be built on the site of the now-vacant healthcare offices next to Olive Garden. A second, another Darden Restaurants-owned eatery, would be located in the parking lot area north of Sears. Orlando, Fla.-based Darden owns the Olive Garden, Red Lobster, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, Seasons 52 and Eddie V’s brands.
While a deal for a new restaurant at the corner of Harlem and Cermak is more on the horizon, the shopping center’s ownership is reportedly fielding inquiries from at least five companies. Reportedly among those suitors are Starbucks, Caribou Coffee, Noodles and Company, Qdoba Mexican Grill and Chick-fil-A.
“There is discussion under way right now, although we haven’t received any positive confirmation from the owners yet that a deal has been struck for that, but they are looking to bring a restaurant in at that location,” Scarpiniti said.
Officials are predicting a 5-percent overall decrease in sales tax revenues for the 2012-13 fiscal year, due to the loss of the village’s top sales tax producer Edward Don. That company will leave its longtime North Riverside home about halfway through the fiscal year. It accounts for most of the projected $536,000 drop in sales tax revenues in the budget.
But projections show officials are confident that the pain will be short-lived. Talks with Costco are progressing, say village officials.
Village Administrator Guy Belmonte in a separate interview, said, “The big-box user we’re hoping will be open by October or November of 2013. We’re assuming an agreement will happen by the end of this calendar year.”
That future outlook has convinced village officials to stand pat on raising additional revenues this fiscal year through fee and permit increases. For the past four years, the village has raised fees across the board by 10 percent each year.
Further, it looks as if the village board will lower its liquor license fee by 25 percent after a survey by village staff revealed North Riverside had the highest liquor license fees in the area. The cost of a tavern liquor license will drop from $4,871 per year to $3,650, while the restaurant liquor license will fall from $4,070 to $3,050.
Non-union village employees will also get a 2-percent pay raise, effective May 1, and residents can expect their waste hauling bills to increase by 6 percent. Trustees Rocco DeSantis and H. Bob Demopoulos were against raising waste hauling rates with the prospect of high water bills on the horizon due to the installation of new water meters throughout town.
But other trustees agreed the increase was necessary in order to get the village’s refuse fund into the black. It is currently losing money and requires an annual subsidy from the village’s general operating fund to keep it solvent.
“Basically the very same philosophy that this board has had for the past 20 years … not passing on incremental costs to our residents to basically spare the burden to the residents of the shared costs, funding it with general fund revenues, the only way to do it without major cuts in services and programs and staffing levels would be to cut the pension fund obligation,” said Scarpiniti.
That has been the village’s main strategy for balancing its budget for the past four years. Last year, the village made a small contribution to its pension funds of $250,000, money the village received in 2011 by selling the rights to a cellphone tower near the North Riverside Park Mall.
The village faced a $1.3 million pension contribution for fiscal year 2012-13, but instead has decided to contribute just $300,000 toward its pension obligations. The village won’t make the contribution until the end of the fiscal year, next April, when it has a better picture of its financial picture.
Trustees also agreed to fund the remainder of the projected budget deficit, about $620,000, by using cash reserves and by taking advantage of the Illinois comptroller’s debt recovery program, which allows municipalities to tap into state income tax returns to collect money for past due fines, such as parking and red light camera tickets.
According to Scarpiniti, North Riverside has $270,000 in unpaid red light camera tickets outstanding.
“Even if we’re able to collect a small fraction of that, it’s going to dent this deficit that we have right here,” Scarpiniti said.
