By Anna Lothson
Just a few years ago, Oak Park didn't have any money to bank on if something went wrong. And plenty went wrong as the national economy convulsed.
Now that times are turning a bit in the village and in the nation, the village government is working to establish a policy that keeps Oak Park's financial health in check.
Craig Lesner, the village's chief financial officer, presented a policy recommended by the village board's finance committee that establishes a minimum 10 percent fund balance for the village. Of this amount, it's recommended that 60 percent of that total remains in cash or other liquid assets, according to Lesner's report.
In the case that the fund balance dips below that target, staff shall recommend a budget and operational strategy to bounce back.
Lesner said because fund balances are needed to respond to unexpected emergencies and annual cash flow requirements, that it's an essential guideline. "It's a guiding principal for the finance department," he said at a recent meeting.
Trustee Colette Lueck said the policy is "long overdue," and said it's a good step since the village isn't currently in compliance with the policy it wants to enact.
Lueck said she was surprised when she joined the board four years ago that there was no fund balance or a policy for one. Since then, however, she's been impressed with the changes. "I think we've done the work of turning around the funding models," she said. "It's difficult to know when you've reached that point."
A policy is important to have in place, she said, but not to the point where it dictates decisions more than necessary. She said the policy should have leeway in case a necessary project or emergency pops up that trumps the need for reserves.
She also thinks it's important that when that balance drops below the recommended 10 percent that the issue be brought back to the village board and the finance committee for discussion.
"It's a mechanism for making sure people are paying attention," she said. "To make sure decisions are being made thoughtfully and not just sifting through."
The tricky part of establishing and maintaining a fund balance policy is that while it's important to have one, Lueck said, it can't be so high that the village is collecting too much in taxes from residents in order to maintain a certain amount.
Trustee Bob Tucker, who serves on the finance committee, said the fund balance helps provide a cushion for when hard times hit again. Like a "rainy day" fund a resident may have, he said it's important the village implement a similar model.
"What we've come to learn in recent times is that everything doesn't hum along in life," he said. "Sometimes there are bumps in the road."
Tucker said the village is working toward reaching a more stable amount when it comes to the fund balance, but noted it's always best continue striving for higher numbers.
"Achieving that balance is going to create a very stable environment where we are not necessarily worried about dips and woes in the economy," he said. "Recent history has taught us not everything goes perfect. You have to set money aside."
The issue is expected to be up for a final vote at the June 4 meeting.