Riverside trustees will soon consider whether to raise liquor license fees and water and sewer rates and mull imposing a local sales tax on gasoline for the coming 2020 fiscal year to boost operating revenues in the face of predicted annual budget deficits in the future.
Village Manager Jessica Frances and department heads are in the midst of crafting a preliminary 2020 budget, and on Oct. 3 Finance Director Karin Johns sought direction from the village board on where to look for raising that new revenue.
The preliminary budget will be discussed at the village board’s next meeting on Oct. 17. In addition to things like increasing water and sewer rates, liquor license fees and a possible gasoline tax, trustees will also consider raising the fee the general operating fund charges the parking lot fund to pay for maintenance of the village-owned parking lots.
The newly paved commuter parking lot, which now sports permeable pavers, is expected to cost more to maintain annually.
“We have structural problem because of tax caps,” said Village President Ben Sells, “We can only raise revenue by 5 percent or the Consumer Price Index, whichever is less, which has been around one and a half or 2 percent historically, and we have costs going up double digits. And that’s what we are going to be confronting in years to come.”
Sells was referring to six-figure operating budget deficits projected for 2022 and beyond. In 2021, the general fund deficit is projected to be about $40,000, but from there they begin to increase. By 2024, the general fund deficit is projected to be almost $400,000.
Preliminary projections for fiscal year 2020 show the village expects a modest surplus of about $25,000. But such projections are just that and can change due to unforeseen circumstances.
For example, the village’s 2019 budget projected the general operating fund, which pays for day-to-day expenses like salaries and benefits of village employees, ending the fiscal year about $4,000 in the black.
Officials now predict a general fund deficit of about $434,000 for fiscal year 2019, which ends Dec. 31. Total expenditures from the general fund in 2019 are projected to be about 6 percent over budget.
That deficit is largely related to a roughly $500,000 transfer out of the general fund to pay for a variety of capital expenditures, including new village surveillance cameras, a police vehicle, the Guthrie Park veterans memorial improvements, computer software and purchasing the property at 43 E. Quincy St.
That money was taken from the general fund’s unassigned cash balance, which as of Jan. 1 had grown to about $965,000 due to prior year surpluses.
While few rate or fee increases were proposed on Oct. 3, trustees agreed that they wanted to see recommendations for their Oct. 14 discussion of the preliminary 2020 budget.
Johns and Frances estimated that a 3-cents-per-gallon local sales tax on gasoline would bring in between $25,000 and $43,000 annually. There are three gas stations in Riverside, all along Harlem Avenue.
Elected officials appeared lukewarm to that particular tax, saying they didn’t know if the relatively small amount of revenue would be worth the potential impact to those businesses.
While Trustee Edward Hannon said he’d like to an analysis on how much a gasoline tax “moves the [revenue] dial,” Sells said he favored a wait-and-see approach.
“We’re probably looking at a relatively small amount of money in terms of receipts,” Sells said. “Balancing that against the negative impact it would have on our businesses, I would want to wait for a while and see. If it turns out we become an island that hasn’t done this, it might be different.”