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Council Continues Talks on Proposed FY12 Budget

On Tuesday, October 18, 2011, the Village Council continued discussions on the Proposed FY2012 Budget.  This was the fourth opportunity in a continued series of public meetings on the budget to promote dialogue among the public, Village Council and Village staff.

A portion of Tuesday night's discussion centered on the General Fund balance and the fact that in 2011, revenues are expected to exceed expenses by approximately $937,000. This contribution to the General Fund balance in 2011 is necessary to provide adequate reserves in 2012 pursuant to the Village's financial plan.

The Village's Long Range Financial Plan calls for the Village to maintain a General Fund balance or "reserves" equal to 40% of annual expenses. With the estimated contribution of $937,000 to the General Fund balance, the balance in the General Fund will be approximately $16.62 million. The budgeted General Fund 2012 expenses are $41.35 million. The targeted fund balance (40% of annual expenses) is $16.54 million.

The Village retains sufficient reserves  to respond to unforeseen events which may cause loss of revenue or an increase in expense. These unforeseen events include severe storms, natural disasters, loss of revenue due to economic conditions and loss of revenue due to changes in State funding for municipalities. 

For example, the Illinois General Assembly is currently considering a bill that could reduce or eliminate the revenue municipalities receive from the State Corporate and Personal Property Replacement Tax. The Village currently receives approximately $375,000 per year from this source. If this bill passes, the Village could lose $375,000. Further, if the Village experiences extreme weather events in 2012 as we did this year, we will use the reserves to cover expenses above and beyond the budget.

In summary, the $937,000 contribution to the General Fund balance in 2011 is necessary to provide adequate reserves in 2012.

Remaining Budget Discussions

Table 1: Budget actions and dates.
Action  Date 
Budget Public Hearing at Council Meeting      Tuesday, November 1
Vote to Adopt Budget, Hearing on Est. Tax Levy Tuesday, November 8
Adopt Estimated Tax Levy                              Tuesday, November 15
Tax Levy Public Hearing                                     Tuesday, December 6
Adoption of Tax Levy and Abatements  Tuesday, December 13