Since 2009, it had been just one piece of financial bad news after another for the village of North Riverside. Some of the blame could rightly be placed on a national economy that had all but collapsed. And some of the blame was chickens coming home to roost in the wake of longtime local fiscal policies that were unsustainable.
One of the final indignities came in 2014, when the village’s bond rating crashed to a level in danger of hitting junk status. The rating also came with a negative outlook toward the future and the rating was reaffirmed in 2015.
But in the years since the real estate crash that played a major role in the economic downturn, North Riverside began making changes. The village ended decades-long practices of subsidizing services like water usage and garbage pickup from its general operating fund, and began asking the customers – like just about every other town – to pay for those services.
The village ended its time-honored tradition of not extending its annual property tax levy, which over time had left money, which could have been used to bolster operations or soften the blow of the recession, on the table.
The village has ended its practice of providing lifetime health insurance to retirees and has moved away from the gold-plated health insurance benefits the village used to offer all employees.
North Riverside was also forced to confront its habit of failing to fund its police and fire pension obligations. That, in particular, has been a painful burden to bear. But, at least for now, the village has found a funding source for the pensions in the form of red-light camera revenues.
Life isn’t perfect.
As the economy has recovered, the village has seen its sales tax base rebound and new businesses like Costco and new restaurants have pumped vital dollars into village coffers.
The result of all of those changes is that in 2016, Standard and Poor’s has seen fit to remove the negative outlook of the village and boost its credit rating, something that will allow North Riverside to sell the bonds necessary to pay for a major street improvement campaign that’s now wrapping up.
Challenges remain ahead for North Riverside. The administration’s relationship with its firefighters remains bitter and a solution may finally end up in the hands of an arbitrator. But that still seems a long way off. It’s an issue that needs resolution.
But North Riverside’s administration can rightly feel good about the progress it’s made in working to dig the village out of a hole it in large part created.
Future village boards and mayors can’t forget about that hard work once the economy starts humming again and they can’t fall into the trap of believing sales taxes are an unlimited resource to pad employee benefits and expand employment rolls.
North Riverside is on a navigable financial path. Yes, pensions will continue to be an issues, as they are for every small suburban municipality. But this is the way. Stay on it.