Even without a state budget and uncertainty over future state funding to local municipalities, Skokie’s 2016-17 budget puts the village “on more stable financial footing than last year,” according to Village Manager John Lockerby in his annual budget address.
“The proposed budget maintains village services while proactively addressing long-term financial challenges confronting the village including accelerated infrastructure investment and enhanced pension funding,” he said.
The $121.6 million draft budget, which has been the subject of several recent budget hearings conducted by the Skokie Village Board, includes spending for more street resurfacing than ever before as well as larger pension contributions to improve the village’s status for its mandated funding obligation.
The proposed budget also includes spending for more street lighting as part of a pilot program established after the need was identified through a village safety campaign last year.
Total revenue in the budget is projected at nearly $121 million, making the 2016-17 proposed budget close to balanced.
Last year, the Skokie budget called for a reduced $80,278 in state grants because of the state’s fiscal uncertainty. But the village is projected to collect more than $273,600 from the state in 2015-16, the budget shows.
This year, without a state budget even in place, there is even more uncertainty, officials say. The village has budgeted the same $80,279 for state grant revenue.
The proposed budget includes a water rate hike of about 4.9 percent. Skokie purchases its water from Evanston and passes on its own increased costs.
“It’s our own little business,” Finance Director George Van Geem said. “It’s a stand-alone fund. All the operations — maintenance, capital requirements — all of that needs to be generated by the water fund rate.”
According to Van Geem, the increase will amount to some $6 more on Skokie’s quarterly water bills. Compared to 15 comparable communities, he said, Skokie remains second lowest in how much it charges for water.
The village budget shows an increase in both sales tax and home rule sales tax revenue from last year, mostly because the economy continues to get better, officials say. More than $16.1 million in budgeted sales tax revenue would reflect nearly a 6 percent hike over the 2015-16 budget, but is slightly less than what the village actually expects to collect this fiscal year.
Home rule sales tax revenue follows a similar line. Revenue is budgeted at $14.8 million, an increase of under 4 percent from last year’s budget but slightly less than what the village is projected to actually collect by the end of 2015-16, the budget shows.
The largest portion of spending in the village budget comes from the general fund at $55.6 million, less than a one-half percent increase over the previous year.
Spending in the fund goes for the majority of services provided to the community, according to Assistant Village Manager Jason Wicha.
“Although the village enters fiscal year 2017 on more stable financial footing, an emphasis was made during the budget preparation process to limit growth and operating expenses in order to allocate additional resources for long-term obligations,” he said.
This conservative approach to budgeting also provides the village with “sufficient financial flexibility” to navigate fiscal uncertainty with the state, he said.
The spending increase of about $224,000 in the general fund over the previous year is due mostly to insurance and wages as well as new membership dues to contract with the Northern Illinois Crime Lab for Skokie Police Department evidence processing, Wicha said.
During the heart of the recession several years ago, the village froze 15.5 positions. Those positions continue to be frozen, he said, which amounts to a continued savings of more than $847,000.
Increasingly in recent budget years, village leaders have focused on pensions and their stated need to raise funding levels. Skokie’s pension funding levels are currently at 68.9 percent for police and 57.4 percent for fire, according to Van Geem.
The proposed 2016-17 budget makes a concerted effort to boost those levels with contributions this year higher than unusual, Van Geem said.
“In all cases, having the money in the bank and growing it, using the concept of compound interest, takes the burden off the taxpayers,” he said.
For years, Skokie’s pension funding levels were at 100 percent. During the recession, Van Geem said, municipalities like Skokie were allowed to dig into pension funds to navigate the devastating economy.
The 2016-17 proposed budget calls for a contribution of $4 million for fire pensions and $814,140 for police pensions. Overall pension levels could start increasing by 2 to 3 percent and move closer to an 80 or 85 percent funding level, Van Geem predicted. The village’s goal is now to fund pensions at 100 percent every year, he said.
The budget shows Skokie capital improvements in 2016-17 at just over $18 million, highlighted by a major increase in street resurfacing.
According to Village Director of Engineering Erik Cook, Skokie maintains 143 miles of streets. Resurfacing work has a 20-year life cycle, he said, which means seven miles of streets should be resurfaced every year.
Last year, the village resurfaced 4.6 miles of streets, but this year, it is budgeted for 7.2 miles for the first time.
More than $5 million in spending for street resurfacing includes $2 million in new revenue from the village’s relatively new food and beverage tax, reclaimed debt that has been paid off and other means, officials said.
Cook said street resurfacing for 2016-17 will be performed in two phases — late spring and early fall.
The proposed budget also calls for spending $330,000 for additional residential street lighting in the community, a recommendation that came from the Skokie Public Safety Commission’s One Community: Keeping Skokie Safe campaign. Village officials said 87 percent of responding residents also supported more east-west street lighting in the results of a 2015 national survey.
The Village Board is scheduled to hold its final budget hearing at 6:15 p.m. May 2 at Village Hall. The board will then vote on the budget at a regular Village Board meeting.
@SKReview_Mike
