Just three years ago, Brookfield was staring into a financial black hole. When its audit for the 2008 fiscal year appeared in July of 2009, it painted a bleak picture.

The general operating fund had less than $400,000 in reserve – just 2.5 percent of the village’s total expenditures – and its unassigned cash reserves were under water.

On June 25, the village board got its first look at the 2011 audit, and while the village is not exactly flush, Brookfield is no longer on the brink of financial panic. The reserve in the general fund, which pays for day-to-day operations, stood at $1.6 million at the end of 2011.

“I think we’ve turned the corner as far as the financial picture goes in Brookfield,” the village finance director, Doug Cooper, told the village board on June 25. “We have come a long way over the last couple of years.”

While current level of the general fund reserve is a long way from having the three-month cash cushion that government agencies like to keep on hand But it represents about 12 percent of total expenditures, and an increase in that reserve of about $450,000 since the end of 2010.

In 2010, in the wake of the financial hit the village took the previous two years, Brookfield’s village board established a reserve policy, stating that the village would establish a cash reserve equal to 25 percent of annual expenditures.

That year, the village began making contributions to that reserve, which has allowed the general fund reserve to get about halfway to its goal by the end of 2011.

Cooper said the hope is for the village to attain that 25-percent cash reserve over the next three years.

“I think we’ve put ourselves in a better position to deal with factors beyond our control,” said Village President Michael Garvey in a separate interview.

While that part of the financial picture has been positive, the audit shows that the village is still running up against the economic difficulties everyone else continues to face.

For example, property tax receipts in 2011 lagged well below budget estimates, coming in 3 percent (about $270,000) lower than expected. One reason for the lower property tax has been the housing market crisis, which hit the Chicago suburbs hard in recent years.

Foreclosures have slowed property tax payments to the county, delaying that revenue in getting to municipalities.

“The amount of foreclosures and the amount of time it’s taken for tax receipts to catch up is much longer than it’s been in the foreseeable past,” said Assistant Village Manager Keith Sbiral, who also serves as the village’s treasurer.

Cooper said that some of that money due to the village from 2011 will continue to trickle in as the foreclosures and tax issues are resolved in the courts.

“We’re still receiving 2010 receipts payable in 2011, and we’re now in the in third quarter of 2012,” said Cooper. “That will catch up once properties come off of foreclosure and once property tax sales are caught up.”

Sbiral also noted that the village’s property values have fallen since the real estate crash, and that Brookfield’s equalized assessed value for all properties has fallen by $69 million.

“You never want to see property values go down,” said Cooper. “It’s not good for the economy overall in the village.”

In response to continued pressures on its finances, the village cut expenses for day-to-day government operations in 2011 by about $364,000.

The village spent about $83,000 less than it budgeted for building maintenance, almost $100,000 less than it budgeted for legal fees, about $40,000 less on street maintenance and $38,000 less on recreation.

The audit also shows that the village spent $225,000 less in 2011 in capital expenditures than budgeted. The main reason for that decrease can be traced to a new village computer software package, which was to have been paid for in 2011. However, just a portion of that expense hit the books in 2011; the rest will be paid in 2012.

But other expenditures continued to rise, particularly with respect to public safety. According to a snapshot of the past decade, spending on public safety (police and fire departments) in Brookfield has increased by more than 100 percent – or $4.6 million – since 2003.

In 2003, the village’s public safety costs were roughly $4.4 million. By 2011, the cost spiked to $8.9 million.

“I don’t see us making cuts in those areas,” said Garvey. “The only way to reduce costs there is to reduce manpower.

“Ultimately some board down the road may have to make that decision.”

The village’s police and fire pension funds have also suffered in recent years. The police pension fund stood at 46.6-percent funded at the end of 2011, despite the village kicking in about $2 million to the fund in 2010 and 2011 combined.

Meanwhile, the fire pension fund fared better at almost 70-percent funded at the end of 2011. The village contributed a little more than $1.2 million to that fund in 2010 and 2011.

Cooper said the police pension fund remains a concern and recommended coming up with a mechanism for getting that fund above 50-percent funded, either by adjusting what the village levies for police pensions or contributing additional money to the fund at the end of 2012, if finances allow it.

“I believe we’d like to see it get above the 50 percent fund level,” Cooper told the village board.

For the foreseeable future, at least, the focus will be on funding core village services, said Garvey.

“We have to continue to be conservative and spend on core services and not take financial risks or spend on risky propositions,” Garvey said. “I don’t see us getting back to spending dollars on non-essential services.”