June 23rd, 2020 11:28 AM
By Maria Maxham
The climax of the June 17 village council budget meeting wasn't the financials themselves, which were unsurprisingly bleak. Rather, it was the ongoing tension between Mayor Rory Hoskins and Commissioner of Accounts and Finance Dan Novak, which has been building for months, and escalated throughout the meeting. It culminated in the mayor calling for a vote to adjourn the meeting with Novak voting, "No," then saying, "Seriously, sir?" as the vote carried and the mayor walked past him. Novak scurried after the mayor as he ascended the stairs to his office.
The meeting, uncharacteristically short, according to some departments heads, at under an hour, revealed some good news regarding Fiscal Year 2020's finances, which are closing better than expected. The village-wide budget's proposed deficit was $6,128,220, but the actual year-end projection shows an overall gain of $605,061.
"It was a good year," said Letitia Olmsted, the village's finance director.
But the FY2021 budget is being proposed with a total village deficit of $7,442,002, including a projected loss of $3,204,985 in the general fund, which, along with the water fund, comprise the operating funds for the village.
After the meeting, during which Novak asked the other commissioners and village officials several times if they were comfortable with such a large deficit in the budget for the next fiscal year, he reached out to the Review via email requesting an interview to discuss the budget. But over the next few days he did not respond to email, text or voicemail messages from the paper requesting an interview or a statement that could be printed.
At the regularly scheduled village council meeting on June 22, Novak voted against approving the minutes from the budget meeting, minutes that did not include his comments, but he provided no explanation during the discussion. He also said nothing about the budget during his commissioner's report at the end of the June 22 meeting.
During the June 17 budget meeting, Village Administrator Tim Gillian said several times that Forest Park doesn't have an expense problem; it has a revenue issue. He explained that expenses are already low, with department heads working hard to keep costs under budgeted amounts.
As for layoffs, Gillian said that all of the village departments, including those with the highest payroll (police and fire) have "no fat" to cut.
"As the administrator, I don't think we should cut any fire or police," Gillian said, though Novak, apologizing to Deputy Fire Chief Phil Chiapetta who was in attendance, suggested that perhaps a deputy chief was unnecessary.
Commissioner Joe Byrnes asked both Deputy Police Chief Kenneth Gross and Fire Chief Bob McDermott if they could function effectively with fewer officers or firefighters on staff, and both responded that without significant overtime it was not a possibility.
Gillian said all other departments, including Public Health and Safety, Public Works and the Community Center have reduced expenses through cutting either full-time or part-time staff or both.
At one point Gillian responded to Novak's questions about whether the administration felt confident with such a large deficit, "Are we confident? No. We're not." Cash flow, he said, isn't a weekly concern; it's a daily concern. The expense budget is already lean, he noted, and without a way to increase revenue significantly, the budget deficit is unavoidable. He said he is confident in department heads continuing to operate on lean budgets.
Hoskins said although a $3.2 million deficit in the general fun isn't sustainable, he's "optimistic." With the village once more turning on parking meters and requiring vehicle stickers, among other measures to bring in revenue once more after COVID-19 shutdowns ease up, more money will come in. He was confident the village "could climb out of it slowly." Other revenue sources, such as a ride-share tax, will be researched.
Commissioner Ryan Nero said he'd like to see $30,000 added to the budget for flood relief, for a total of $45,000 to provide reimbursement to more residents for flood-control measures for their homes.
A big reason for the large projected deficit in the general fund for FY2021 is related to COVID-19. According to the budget review document from the village, "The effect of COVID-19 will negatively impact revenues in all funds and from all sources, but the biggest is reflected in the general fund."
The biggest portion of revenue in the general fund, at 30 percent, comes from property taxes. But as a result of COVID-19, a Cook County relief plan is waiving late fees on property tax bills, allowing homeowners to pay the second installment by Oct. 1, rather than Aug. 3, without penalty, which could create a revenue shortfall and reduction in available cash flow for the village.
State income taxes, almost a quarter of the general fund's revenue, is being budgeted at a 24 percent reduction, or $1,284,402 less in revenue due to reduced spending during COVID-19 shutdowns.
The potential for recreational marijuana tax revenue, which the village council previously voted to impose at 3 percent in anticipation of dispensaries or processing facilities opening in Forest Park, is still far off, as the state has postponed granting licenses due to COVID-19.
In terms of general fund expenses, $2,474,960, a 13 percent increase, is expected over FY2020's numbers. The biggest expense category is wages and benefits, which accounted for 63 percent of general fund expenditures in FY2020. Based on FY2021 contracts, a 3 percent or $331,368 increase in wages and benefits is expected.
Last month, unions representing village employees agreed to wage concessions to lower expenses due to the COVID-19 crisis. However, the FY2021 budget does not reflect these concessions in order to account for additional retirements or benefit payouts if layoffs are unavoidable.
The village clerk account, which includes insurance premiums, debt service and police and fire pension obligations, is expected to spend an additional 8 percent, or $461,660, over FY2020's numbers. This includes department wage increases, as well as insurance premiums, collection fees and pension obligations.
The police department, which represents 24 percent of village expenditures from the general fund, will increase by 7 percent or $334,819 over FY2020's closing numbers. This includes department wage increases for administration, sworn police and civilian staffing.
The fire department's expenses, representing 15 percent of village expenditures from general fund, are expected to increase by 10 percent or $331,151 in FY2021. This includes department wage increases as well as expenses for equipment, training and retirements. Anticipated reductions in the department total ($47,957), include deferral of a replacement vehicle and savings on the new paramedic contract.
Hoskins said there will be a second budget meeting "in about 10 days." In an interview, Gillian said he is willing to sit down with anyone — village employee, elected official or resident — to go over the finances in as much detail as desired.
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