The Village of Oak Park released a first-look 2006 budget Monday night totaling $129.5 million, featuring major infrastructure investments and some new programs while holding the line on property taxes for operations.
Village Manager Carl Swenson heralded the budget's addressing of board priorities in part because of cost reductions found in the recently approved early retirement program and expansion of the village's adjudication of parking tickets. "The only tax increased needed," Swenson writes in a summary to the budget, is a one-cent per gallon gas tax.
However, the proposed "aggressive increase in all capital improvement expenditures" will mean higher property taxes for homeowners. Capital improvements include $21 million for this year's portion of construction of a new public works facility, local street and alley improvements ($3 million), and money set aside for an animal shelter.
Village finance chief Greg Peters said the bond-related property tax increases would amount to a few percentage points for the first year of a 20- to 25-year repayment, after which time the expense would be offset by other bonds being completely paid off.
A one-cent gasoline tax increase is proposed to pay for $6 million in streetscape improvements?#34;so-called "catalyst projects"?#34;in the Harrison Arts District and eastern Chicago Avenue business district. What those projects will be has yet to be decided, but the idea is to encourage development by improving infrastructure.
"We're looking to, in essence, create a more pleasant street environment," Swenson said.
The penny hike would bring the total gas tax to 4 cents, upping the money raised by $280,000 to more than $1 million. Bonds would be sold to fund the projects (two more of which are scheduled for 2007) and up to half of the revenue from the gas tax would go to the debt repayment.
Expenditures in the General Fund?#34;the largest of nearly 40 village funds that supports most village business?#34;would rise 5.6 percent, while revenues for the fund would actually drop under the proposed budget. That's because the village pocketed approximately $1.75 million it didn't spend in the 2005 budget.
Swenson calls it "resources forward," a common practice in recent years. Unused funds from the prior year's budget are put toward one-time expenses, not recurring expenses like hiring new employees.
The village's budget year matches the calendar year, from January to December.
The goal is not to balance each fund year by year, but to keep fund balances at or above 20 percent of the annual budget, a conservative approach that provides some padding for rainy day expenditures.
Swenson presented an overview of the budget to the board at its regular meeting Monday night. No discussion followed, but the board will begin a two-month study of the budget at a meeting tonight at village hall. The process calls for five sessions before the budget is scheduled for final approval Nov. 21.
Three board goals?#34;improve web access, communications, and better service in the building and property standards department?#34;are reflected in new positions the budget would create.
Four vacant positions will not be filled to offset the financial burden of creating up to 12 new full-time-equivalent positions, including three in building and property standards, and 2.5 in information technology and communications.
Swenson said the overall increase in full-time-equivalents would be 4.5.
Other cost savings are expected in early retirement programs, both for police and other employees. The budget assumes the non-police program will save $750,000 this year.
But the village has said it can't control who will retire under the program. What happens if people don't retire?
"They will," Swenson said. "We're certain there's going to be a certain number of people who will leave under this program. I'm confident in these numbers."
Qualifying employees will have an economic incentive to leave by June, giving the village a clearer picture of who will leave and more time to realize savings, Peters said. The costs of the program will not be paid until 2007.
Swenson said some employees have already said they will retire.
Central to the savings plan is "managed attrition," whereby roughly one in five positions being retired from would themselves be retired, three-month delays would separate a retiree's departure and the hiring of a replacement, and positions would be filled at lower wages than currently earned.
New revenue totaling $400,000 is expected from expanding the village's adjudication services. Night court will start early in 2006, and the court will add citations from the building and property standards and health departments.
The budget allots $15,000 for a new program?#34;"Sustainable Oak Park"?#34;an undefined idea driven by the board to find ways to make the village more environmentally sustainable. Generally, sustainable practices call for reducing waste, producing less toxic substances and pollution, and reducing dependence on non-renewable resources such as petroleum.