The village of North Riverside is planning to use roughly $300,000 to $325,000 in its general operating fund reserve to cover a projected deficit in its 2018-19 budget.

According to a draft budget discussed by members of the village board for more than five hours at a finance committee meeting on July 5 and again on July 9, officials expect another solid year of sales tax receipts despite the loss of three key retailers – Toys R Us, Carson Pirie Scott and Tony’s Finer Foods – and predict continued growth in tax receipts from the village’s restaurants.

But there’s no way to escape the impact the loss of the three major retailers will have on the 2018-19 budget. The draft budget examined by village trustees last week projects the village receiving about $500,000 less in state and local sales tax revenues.

Finance Director Sue Scarpiniti predicted the loss of those sales taxes to continue into 2019-20, recovering only in the following year.

“In 2020 we anticipate the full loss of the three retailers,” Scarpiniti told trustees. “But as we get closer to the 2020 fiscal year, we’ll have a better idea. By 2021 we expect the majority of those retailers to be replaced.”

Meanwhile, officials are poised to pass an increase in water rates to help pay for ongoing improvements to the village’s water main system, and they are also planning a handful of new fees (see accompanying story) they hope will help fill gaps in the budget.

By state law, the village must pass an appropriations ordinance, which sets legal spending limits, by the end of July. The 2018-19 fiscal year began on May 1.

The village has scheduled a public hearing and vote on the appropriations ordinance for July 23.

The unaudited results of the village’s 2017-18 fiscal year indicate that North Riverside had about $5.56 million in its general operating reserve, giving officials confidence they can weather any deficits in 2018-19 by using that reserve to cover any shortfall.

The good news regarding the recently completed fiscal year, said Scarpiniti, is that the village finished at roughly break even after predicting a shortfall of about $400,000 just two months ago.

What saved the day, she said, were higher-than-expected sales tax revenues in the final quarter of the 2017-18 fiscal year. The village’s bottom line also benefitted from a large  capital expenditure for the new West Central Consolidated Communications (WC3) being moved into 2018-19.

Officials are holding out hope that increased sales tax revenues, restaurant receipts, video gambling revenue and still-unknown amusement taxes from the Round 1 gaming complex that will be opening later in the former Sears lower-level at the North Riverside Park Mall may help them close the predicted gap in 2018-19.

The village’s places-for-eating tax revenues and receipts from video gambling have doubled since 2015-16. Combined, the two line items last year brought in almost $1.2 million.

In 2018-19, the village expects those two line items to bring in more than $1.3 million.

Red-light camera violations will continue to be an important source of revenue for North Riverside. While the draft budget projects a slight decrease in revenue from red-light camera tickets, the number has been conservatively budgeted.

For the past three years, the village’s revenue from fines has grown every year and has jumped by more than $1 million since 2016. In 2018-18, fines represented 17 percent of the village’s total revenues.

While revenue from red-light ticket payments did fall last year, the village more than made up for that decrease by collecting on unpaid tickets through the Illinois comptroller’s Local Debt Recovery Program, which allows municipalities to collect unpaid fines by garnishing income tax returns.

In 2017-18, the village collected $1.3 million in red-light tickets fines and another $1.3 million through the state’s debt recovery program. According to Scarpiniti, the village is still seeking to collect more than $7 million through the state’s program.

But, a potential land mine may be waiting in the form of whatever happens when the village and its union firefighters settle on a new contract. The two sides are slated to resume arbitration later this month.

Since firefighters have been working without a contract since April 30, 2014, the impact of an arbitrator’s award – and the immediate, retroactive raises such an award might entail – is unknown.

No wage increases for firefighters have been built into the 2018-19 budget.

Fee hikes and new revenue proposed for 2018-19

As the village of North Riverside braces for an operating shortfall during the 2018-19 fiscal year, officials are proposing a handful of ways to increase revenues to pay for village operations and for important capital projects.

Residents and businesses can expect to see their water rates increase again. At the July 5 finance committee meeting where the draft budget was discussed, village trustees agreed that they would hike water rates by $2 per 1,000 gallons of water. That means someone paying a minimum water bill would see it increase by about $12 every two months, or about $72 annually.

The hike, which is expected to bring the village an additional $400,000, is needed to help pay for a multi-year major water main replacement project along Cermak Road west of First Avenue.

Phase II of that work is planned for later this year between 5th and 9th Avenues and is expected to cost $650,000. Instituting the rate hike this year will help ensure the village has enough money to fund Phase III of that project in 2019.

The village is also proposing to raise vehicle sticker fees from $35 to $40 annually for residential vehicles, and will charge higher rates for addresses where more than two cars are registered.

In addition, the village intends on discontinuing the practice of having residents call in overnight visitor parking and instead have homeowners buy overnight parking passes. Daily stickers would be 50 cents, but the village is also proposing a semiannual pass for $75 or a full-year pass for $150.

North Riverside will also raise liquor license fees for video gambling parlors. Beer/wine licenses will increase from $10,000 annually to $12,500, while full licenses will go from $12,000 to $15,000.

Meanwhile, the village is also proposing that all commercial properties that have fire alarms formally register those systems with the village on an annual basis for $100. The fee is expected to generate $25,000 in revenue. The village will also begin to pass along to businesses fees for health inspections.

Finally, the village hopes to recover $100,000 by instituting a non-EMS response fee, which it would impose on non-residents who need the use of non-EMS fire services – for example, it someone gets in a minor fender bender or their car catches fire.

In the past three years, according to Fire Chief Thomas Gaertner, the village has responded to nearly 500 such calls and would have generated about $500,000 during that time.