Oak Park budget talks focus on pensions, planning

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By Anna Lothson

Staff Reporter

Oak Park has seen the reality of sharp financial cuts in recent years, and after learning from past budget woes, village trustees agreed today's budget must anticipate tomorrow's challenges.

The cutbacks of 2009 and 2010 linger in most current financial discussions among board members as the group recalls the "painful process" that left the village without 20-25 percent of its staff. The village has recovered in the past few years and implemented new evaluation measures, like a performance management program, so the board has determined now is the time to look ahead in order to avoid future pitfalls.

Preliminary discussions about the 2014 budget began Monday evening during a special board meeting where trustees spoke bluntly about issues needing to be addressed. Trustee Ray Johnson said now is the time for the new board to dive into the budget to flesh things out.

"I don't want to be the skunk at the picnic, but we have some structural issues in this budget," Johnson said. "I think as a new board, with some new ideas and some new perspectives, this is a great time to figure out some of those structural issues — like pension and debt and future debt in regards to capital improvements."

Trustee Peter Barber weighed in to ask how Oak Park has historically approached its budget and whether there is a better way to work with department heads so they can determine how to operate with less, regardless of what last year's budget was.

"Is there another way of looking at that to say, 'OK, here is the max we can go,'" Barber posed to the group, "within the departments almost a zero-base type of approach." This, he said, means asking each department one question: "What do you really need this year?"

Because local governments typically set aside a certain portion for reserves and spend the rest, Barber suggested there is a way to encourage department heads to review each item of their budget to make more fiscally responsible choices.

That approach, however, has already been implemented in Oak Park, said Trustee Bob Tucker, who serves on the finance committee.

"That has been the process," Tucker said. "I think we've been pushing back against that and challenging department heads to find and cut where they can, to the point it hurts sometimes."

Trustees agreed that more input from individual departments — another dimension of the performance-management approach — is needed so the board can piece together what structural issues might still be overlooked. The board also collectively agreed that Oak Park is in good shape today, but the 2014 budget must prepare for long-term cost savings to address concerns like rising pension costs that are not being adequately funded by the state.

"I hope the direction to staff is to be thinking long term," Tucker said.

When it comes to cutting back, Trustee Colette Lueck said there needs to be more strategic decisions of where cuts could and should come from. Again, she pointed to the new performance management program.

"We need to find out where do people still have a little meat on the bone … particularly in places that earn us revenue," Lueck said. It's important, she added, for staff to have a clear understanding of achievable goals because right now there are conflicting messages being conveyed. Staff has been directed to not increase taxes but also address long-range funding holes, Lueck said. They've also been told to streamline processes but also find ways to invest money without spending money.

President Anan Abu-Taleb focused his comments on what he's been preaching since the campaign, which is eliminating wasteful spending. This also means addressing economic realities like rising pensions that have the potential to cripple local governments. Oak Park has kept up with its pension obligations, but a shortfall from the state poses serious challenges for future budgets.

"We can't pretend they are not there," Abu-Taleb said. "We need to do everything we can to be responsible."

Johnson and Lueck also spoke of pension challenges, saying Oak Park can't bank on Springfield making necessary changes, especially in light of the unsolved pension debate ongoing at the state capitol. Johnson said it's important the board get a "much longer view" of what pension issues Oak Park faces.

"There is a window where we have to work with communities to change legislation," Lueck emphasized. "Unless it changes, this is a recipe for disaster."

Before the meeting closed, Village Manager Cara Pavlicek reviewed what she called a "fiscally conservative timeline" to review the 2014 budget. The next stages includes meeting with departments to provide budget training, a review of funding requests, reviewing updates with the finance department, and conducting budgeting hearings with each department. Overall, Pavlicek laid out a 15-step process that has the finance committee doing final tweaks in October, which would bring the budget to the village board by early November, ready to adopt by early December.

Contact:
Email: anna@oakpark.com Twitter: @AnnaLothson

Reader Comments

11 Comments - Add Your Comment

Comment Policy

Buck Passer  

Posted: June 27th, 2013 2:11 PM

Johnson and Lueck are very experienced and articulate at passing the buck. Bridgett is right- quite simply, they blame the state for rising expenses, while refusing to do what's necessary to address and counteract those expenses at the local level. It's so much easier to say its out of their control. They make the same hollow speeches every year. And get nothing done. Anan spoke less (not hard to speak less than RJ and Coco) but what he said had much greater practicality.

John Butch Murtagh from Oak Park, Illinois  

Posted: June 27th, 2013 11:12 AM

WatchTV6 from Oak Park -- We are on different pages. I thought the bulk of the conversation by board members was a repeat of chatter that has been the milestone of our government. The board is a supposed to be a decision-making body. If the board is was not prepared to give direction to the staff, then the meeting should not have not have been held. Listening to and participating in a recap of all the problems Oak Park has had in the past is not a solution. Bridgett's posts captured the board meeting perfectly. Her comments deserve a read!

Bridgett from Oak Park  

Posted: June 27th, 2013 2:11 AM

(CONT.)--the self-insured retention fund and the health insurance fund. And he asked about debt ratios as he noted that the Village has $84 million in debt, that the budget is $110 million, and the Village collects $22 million in property taxes.

Bridgett from Oak Park  

Posted: June 27th, 2013 2:10 AM

"I heard a Village President ask to end the meeting quick with little contributed." Really, because what I heard was him asking specific questions such as how the 2012's expenses could be the same as its revenues (which didn't get answered); and a supposed contingency fund that the CFO's own slide mentioned, but it seems like there isn't such a fund. And he contributed information such as that two funds that are the most problematic--(CONT...)

Bridgett from Oak Park  

Posted: June 27th, 2013 12:59 AM

Yes, all that was mentioned, and...??We've heard it before.The same problems were raised, but not the solutions.Pension costs were blamed, again.We were reminded, again,that because the Village has no control over pensions, that it's not their fault. And is it 20% or 25% of the staff costs that were cut? Different people used different stats. Just one example of imprecision, which was disconcerting when talking about a finances. But hey, it was billed as an "informal discussion" so there ya go.

WatchTV6 from Oak Park  

Posted: June 26th, 2013 11:16 PM

@ Butch Murtagh: We watched the same meeting, but interestingly you leave out key details. I heard Trustee Lueck talk about the pension squeeze. I heard Trustee Johnson talk about the need to determine how board goals would be prioritized into the budget. I heard Trustee Barber talk about zero based budgeting. I heard a majority of Trustees talk about key structural issues impacting the Village Budget, and I heard a Village President ask to end the meeting quick with little contributed.

John Butch Murtagh from Oak Park, Illinois  

Posted: June 26th, 2013 4:37 PM

Hi Jim - Every time I think of the subject of gun control, I think of the children that have been slaughtered in schools. To back off on the fight for gun common sense is ignoring the deaths.

Bridgett from Oak Park  

Posted: June 26th, 2013 3:56 PM

I agree with you. There was a whole lot of talking, but nothing really being said. Felt more like a show to me than anything else. I'm looking forward to seeing how all of this will unfold...

John Butch Murtagh from Oak Park, Illinois  

Posted: June 26th, 2013 11:28 AM

The whole process is backwards. The staff departments create a budget for their operation. It is then consolidated by the CFO and VM and sent to the board. If strategic thinking was injected at that point, it would require the staff to go back and redo its work. That makes no sense. As far as the public handouts given out at the budget meeting. It was a total insult to those attending.

Bridgett from Oak Park  

Posted: June 26th, 2013 3:59 AM

@JBM, Probably the Finance Committee will get more in to the nitty gritty that you're talking about. Looking at the graphs on the handouts (which, while I appreciate that the public got copies, because they jammed three pages onto one, the figures were teeny tiny and thus unreadable), as well as witnessing the lack of answers from the CFO to specific questions about the graphs, I think Monday's Village Board meeting was broad brush strokes about the mechanics of putting the budget together.

John Butch Murtagh from Oak Park, Illinois  

Posted: June 25th, 2013 11:28 PM

I attended the board meeting about the 2014 Budget and was disappointed. The meeting opened with the CFO giving a slide show on the financial trials of the last decade. The show included a bunch of excuses with the state being the villain for changing the state's tax code changes, and everything else on the recession. There was talk about solving our high property taxes and the pension debt, but nothing that seemed like fresh thinking or action. The end of the meeting was about how the staff will go about putting together a 2014 budget. The budget process is no different than 2013 except it will be pushed back one month to ensure that the staff has more current 2013 data to guide them. There were two things missing at the meeting. There was no mention about the visions and goals that the board created a couple of weeks ago. Perhaps the vision and goals can be accomplished without funding. The one word that was missing during the meeting was STRATEGY. A strategy is a roadmap and every budget needs one. How does the staff know what to budget if the board has not provided a strategy and priorities to guide them? Peter Barber (new board member) tried to get the board to meet in the summer to get a 2014 working strategy in place before the staff's budget recommendation arrives in September. That went no where with the other board members. All in all, disappointing.

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