Skokie residents will have to dig slightly deeper into their wallets to pay for their water bill in fiscal 2012 under the proposed budget, but other taxes and fees will stay the same. However, there are some potential red flags that require some attention.
The village staff has submitted a $48.7 million budget for next year, which represents only a 1.38 percent increase over this fiscal year's spending.
If approved by the board of trustees, the water rate will rise by almost 5 percent. However, the property taxes will remain untouched, continuing at . Overall, health insurance, rising fuel prices and recycling costs continue to provide challenges as all three have increased over the last year.
What were the specific challenges for fiscal 2012?
“The dramatic increase in gasoline costs was a bit of a surprise,” said Assistant Village Manager John Lockerby, who cautioned with prices now well over $4 a gallon that could be a persistent problem for the village in next year's budget.
In regards to water rate increase, Lockerby noted the average residential water bill will rise from $31.80 to $33.37 a month, but Skokie will have the lowest rate of 16 neighboring communities.
Village Manager Al Rigoni said in a statement last week that the increase was necessary to cover an annual 2 percent spike for water purchased from Evanston as well as to maintain the current water system.
Certain tax revenues, such as from the sales and hotel-motel levies, rose by 5.3 percent last year, a trend the village expects to continue. For the first time since the economic downturn began, a partial easing of Skokie’s hiring freeze will occur under the proposed budget as positions within the fire, health and Public Works departments will be reinstated.
Continuing the theme of a strengthening economy, the spending proposal does not dip into the reserve fund, halting a practice done during the two previous fiscal years. The reserve fund now stands at nearly $9 million--about $5 million less from its high before the recession took hold.
Village officials are optimistic the reserves can be replenished over time and note that Skokie has received Triple A bond rating from two rating agencies.
That Triple A bond rating is good news for Skokie taxpayers, according to Laurence Msall, the president of the Civic Federation, a nonpartisan watchdog agency that analyzes government budgets.
“The Triple A rating is the highest rating given by the bond houses and generally reflects superior confidence in the government's finances," Msall said. "The benefit to the taxpayers of Skokie of maintaining a Triple A rating is that the cost of borrowing is much lower than for lesser rated government debt.”
As governments of all sizes struggle with pension obligations, Skokie’s fire pension fund was at 61.4 percent and the police fund was at 78.4 percent, both of which reflected increases over the previous fiscal year. The added money in the respective balances can be traced to the fiscal 2011, when a new municipal utility tax was implemented.
Officials expect the cash flow will be about $2 million in revenue for the pensions funds in fiscal 2012. The village has a goal of 90 percent funding for both pension funds at some point down the road.
“Although the fire and police pension funds are funded at a lower rate than the village would like, the reasons for that include past pension benefit enhancement mandated by the Illinois General Assembly and a reduction in investment earnings to the pension funds,” Lockerby said. “It should be noted the village of Skokie public safety pension funding levels are better than many municipalities.”
Where major problems also may lie ahead is with the village’s recycling program. The Public Works Department has requested an additional $250,000 to raise its total budget to nearly $10.7 million.
That request was made as negotiations between the village and the service provider have reached a stalemate. The contract ends in May and an extension is being sought.
However, Public Works Director Max Slankard acknowledged during the April 11 budget meeting that he was frustrated with the current situation as both sides had dug in their heels and a resolution did not appear close at hand.
In other public works news, Slankard said the village had removed more than 700 trees infected with Emerald Ash Borer and his staff continues to look for others affected by Dutch Elm Disease.
In terms of bricks and mortar projects, the budget proposal calls for about $2 million in capital spending on resurfacing and improving the two intersections--Skokie Boulevard and Searle Parkway as well as Old Orchard Road and Skokie. The village has received millions of dollars from federal, state and private sources to supplement funding for those projects.
To spur economic development, the village will use tax increment financing, better known as TIF, in both the downtown area and along West Dempster Street. The village has acquired properties along Dempster and hopes to sell them to prospective developers at some point soon.
Trustees will have one more open budget meeting on April 27 and the entire matter could be voted on as early as May, depending on any changes that are proposed. The new fiscal year begins May 1.
At the April 11 meeting, the village board seemed receptive to most of the proposals.
“I’m pretty happy with it,” said trustee Don Perille. “We didn’t have to increase real estate taxes and we are giving the same high level of service.”