Elected officials in Riverside indicated last week that they’ll perform a bit of financial juggling to balance the 2021 operating budget and give staff time to address annual budget deficits projected for years to come.
At the same time the village’s property tax levy has averaged annual increases of 2.35 percent during the past decade, the village’s annual police pension obligation has directed more and more of the levy away from operations.
The pension obligation is expected to continue to outpace property tax increases in the future, with 5-percent hikes expected in each of the next five years. While village administrators were able to cut costs during a pandemic that saw revenue shortfalls of nearly $500,000, it’s unclear what impact the COVID-19 pandemic will continue to have in 2021.
Village Manager Jessica Frances, who started as Riverside’s finance director in 2012 before being elevated to the village’s top administrative post three years later, called the 2021 fiscal year budget “the most difficult budgeting year in my career.”
At their meeting on Sept. 17, Riverside trustee got their first look at what Frances and Finance Director Karin Johns have projected for the 2021 operating budget and beyond, and it wasn’t pretty.
“I think, strategically, creating a stop gap for the village in 2021 and allowing staff to figure out some modifications of what can be done for the future and creating a strategy would be very helpful,” Frances told trustees.
Administrators are projecting a roughly $322,000 deficit in the general operating fund, with projected deficits in years 2022-25 ranging from about $210,000 to almost $400,000.
“The divergence between what we’re able to levy versus the inflation we face in health care, construction, infrastructure – this day has been coming,” said Village President Ben Sells.
The public on Sept. 17 got its first real look at just what kind of impact the pandemic has had on village revenues in 2020.
Riverside is expecting to collect about $100,000 less in sales and places-for-eating taxes than it did last year, and staff are being very conservative in their expectations for those line items in coming years. Projections indicate a rebound of just $15,000 in 2021.
The village’s Parks and Recreation Department is projecting its revenues from programs to fall almost $360,000 short of 2019’s totals. That shortfall will be softened somewhat by spending about $140,000 less on programming and staffing.
Riverside also saved money in 2020 by spending less for special events and cutting expenditures for fire training and staffing, police school safety efforts, park and building maintenance, IT upgrades and the building department.
During their Sept. 17 discussion, trustees agreed to cut a good chunk of the projected 2021 deficit by contributing the minimum required for police pensions, a savings of about $171,000.
They also use a projected $21,000 operating budget surplus expected at the end of 2020 and may tweak the village’s reserve fund policy to tap funds there without having to dip into a pot being set aside for capital improvements next year.