Oak Park makes headway on finances says audit report

General fund balance, finances showing positive trends

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By Anna Lothson

Staff Reporter

Financially speaking, there's significant work to be done for Oak Park, according to the 2011 audit report, but compared to recent years, the village is moving in the right direction.

For one thing, the village has a positive general fund balance. Although it took a large hit because of a one-time payment related to a settlement of the TIF litigation, the village's unrestricted fund balance at the end of 2011 was around $1.73 million. In comparison, in 2006, that number was more than $3.1 million in the red.

Those numbers, along with the remaining 216 page financial report, were discussed at length at a finance committee meeting and a special board meeting held consecutively Monday night.

"It's helpful to note that it's a clean audit and we feel good about the progress that's being made in a number of areas," President David Pope said. "And at the same time stand ready to be able to support the finance department as needed to be able to help make additional improvements to make sure that we really are getting to the point where we want to be."

After hearing the financial report, Pope stressed the village has made strong efforts to keep up with increasing expenses like pension funds to make up for one of multiple shortfalls coming from the state government.

The biggest factor negatively impacting the general fund in the past 10 years has been advances to the parking fund, but the 2011 audit shows the parking fund has begun to pay down advances the general fund that accumulated of the past several fiscal years, according to the report. Interim Village Manager Cara Pavlicek explained the parking fund issues stemmed from debt service obligations taken on after the village built parking garages. Overall, the parking demand didn't keep up with the revenue needed to balance those expenses.

Despite the parking fund issues, the financial highlights in the report show a positive trend for net assets and other governmental activities.

Overall, the report details that the village's total net assets increased by around $320,000, and the governmental activities portion of net assets decreased by around $550,000. Cash investments increased by more than $5 million and unrestricted net assets increased from a negative $9.7 million to a positive $1.9 million.

"You actually added to your infrastructure," said Daniel Burge, a member of the village's audit team. "And to your capital assets."

The report explained that the village's economic market is strong because of some key areas. These include having stable employment levels in the village, having a significantly higher medium income than the state and the county, having a combination of commercial and residential components, a strong sales tax collection, among a number of other improving village funds.

The focus to pay down the parking fund debt to the general fund will positively impact the village's net assets, according to the report, and the village's increasing ability in each fund to produce proper resources to cover its costs will help the village continue achieving financial health. The parking fund debt stirred a discussion among trustees at the finance committee meeting, but board members agreed it was an issue needing to be addressed in depth at a further date.

In 2007 the parking fund owed more than $10 million to the general fund; that amount as of 2011 was reduced to around $3.4 million. It's expected to be fully paid out by 2019 if the current payment rate continues.

The village's Chief Financial Officer Craig Lesner was applauded for his work on getting the audit completed under the state's June 30 deadline, especially since he was without two full-time staff positions in his department that have since been filled.

Lesner said his approach to tackling the issues identified in each year's audit is "prioritizing" issues and keeping the rest on the back burner.

Trustee John Hedges expressed some overall concerns, noting that he's heard the same language year after year when it comes to village finances. The 10-year-plan for dealing with certain financial funds, he said, is troublesome to him.

"I don't think we can continue to be vulnerable in some of these areas, he said. "If there needs to be more, we need to hear that."

Individual departments continually going over budget without board approval is one issue trustees expressed concern for, and as reported in the audit, there are departments where numbers aren't matching up with budgeted amounts. Pavlicek said the management team is working to raise the responsibility of individual departments when it comes to reporting and managing its numbers with the finance department.

Lesner said the audit management letter, which will be available on the village's website, is a critical document for residents who want to better understand the village's financial state and future goals.

It was noted by Burge that when the auditing team visited last year for the same process, the village was much less prepared and the auditors had to correct significantly more issues before the report was finalized.

For example, he said the day-to-day bookkeeping has "improved substantially," producing 20 percent better results those prior years.

"Overall, there's good improvement, but there's still a ways to go," Burge said. "But the ship seems to be moving in the right direction."

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

Reader Comments

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Q from Oak Park  

Posted: July 2nd, 2012 6:08 PM

OPRFDad, it is at the national level, but we don't need to accept it at the Oak Park level. What Pope and the board have in their favor, they are the one's who control the money. Individuals know they can not compete against it and rely on newspapers to keep them informed of what goes on, and that leaves a lot of people asking themselves something doesn't seem to be right, but the papers say everything is good. I don't recall the W.J. ever doing an investigative story, so there must not be any.

Enuf is Enuf from Oak Park  

Posted: July 2nd, 2012 6:06 PM

For the sake of balanced reporting, as per the current audit report (2011 Comprehensive Annual Financial Report, http://www.oak-park.us/Finance/index.html)for long-term debt for the Village of Oak amounted to $92,988,524. For context, this amounts to 4.87% of total personal income of residents, or $1,792.45 per capita. In 2011, reserve funds decreased from $4.8M to $1.7M, far short of its goal of 20% of expenses.

OPRFDad  

Posted: July 2nd, 2012 5:28 PM

Q - you are right. Although w/r to the referendum, I do believe that some supporters think we should keep spending - results be damned. It's that "I don't spend time with my kids but I want to be able to say I give them every opportunity" guilt that some parents seem to experience. But as a general rule, OPrs don't want to spend like crazy, they are just too lazy to keep track of how the Village is wasting money. Seems to be at play on a national level as well.

Q from Oak Park  

Posted: July 2nd, 2012 5:22 PM

OPRFDad, I don't think the majority of people in Oak Park would agree to the way Pope and his board spend money. The taxpayers are not interested enough to start asking questions, and there is no place to get the real answers. This posting board seems to be the best to get information from others. Enuf is Enuf has a lot of information backed up with written facts. When you take the number of people on this posting board, it's just not enough to make any change.

OPRFDad  

Posted: July 2nd, 2012 5:04 PM

Enuf - does it surprise you that Oak Park outspends it comparators? That seems to be Oak Park's metric for success on every measure. Do we spend more on our streets? Do we spend more on our teachers? Do we spend more on our schools? As long as the answer is yes, without regarding to the return on investment on that spending, most Oak Parkers are happy. Because, spending money in a consequence free environment means you care.

Q from Oak Park  

Posted: July 2nd, 2012 4:59 PM

Enuf is Enuf those are facts you have stated. Why does the story say something different? Pope says it is a clean audit. Lesner other then the 250,000 lost on the PeopleSoft clean up, seems to know what he is doing.

Enuf is Enuf from Oak Park  

Posted: July 2nd, 2012 4:32 PM

The audit report uses g:Stat, a tool which draws on a database of information derived from up-to-date audited financial statements of comparable communities, whereby units of government can review comparisons and trends for financial ratios. The benchmark group for Oak Park comes from a database of 100 Illinois communities, limited to those communities of similar population. In the g:Stat comparative metrics, Oak Park did not fare well, as follows.

Enuf is Enuf from Oak Park  

Posted: July 2nd, 2012 4:32 PM

g:Stat findings: General Fund per Capita (financial burden on residents): Oak Park - $852 / benchmark - $764. General Fund Expenditures per Capita (cost of providing services to residents): Oak Park - $895 / benchmark - $764. General Fund Balance as a Percentage of Expenditures (level of protection to cover expenditures): Oak Park - 18% / benchmark - 28%. Conclusion: Oak Park taxes more and spends more relative to comparable communities, w/ inadequate fund balance protection.

Enuf is Enuf from Oak Park  

Posted: July 2nd, 2012 11:54 AM

Pope's use of the term 'clean opinion' is misleading. A 'clean opinion' is a financial auditor's opinion that its financial statements are fairly presented in accordance with generally accepted accounting principles. A clean opinion does not necessarily mean that the village is financially strong or that its future is favorable, since even financially weak firms generally receive clean opinions.

Done from Oak Park  

Posted: July 2nd, 2012 9:49 AM

JBM - I'd be curious to know if the Village would even do something like this since they might all claim that they are separate taxing entities. Consolidated statements - not just balance sheets but income statements also - would be a huge step for this community in trying to understand "where it all goes" or, more likely, where it isn't going.

John Butch Murtagh from Oak Park, Illinois  

Posted: July 2nd, 2012 9:16 AM

What is needed from the taxing bodies is a Common Format for balance sheets which would enable a consolidated balance sheet for the Village of Oak Park. This would allow citizens of Oak Park to understand the complete financial status of its income, expense, debt. etc. This would be a big step for the Oak Park Council of Government or the recently organized elected officials that serve as a consolidated advisory body to the taxing body boards. If that is not the best route, the county could be asked to produce them.

Done from Oak Park  

Posted: July 2nd, 2012 8:48 AM

Some other numbers that are interesting from the Tribune insert - Percentage increase the past ten years of various taxing bodies: Dist 200 - 70.25%; Dist 97 - 53.29%; Village of OP - 58%; OP Park District - 311%; OP Township - 46.48%. The Village of OP also has debts and liabilities of over $126M - don't know if that includes the unfunded pension of almost $95M. Dist. 97 has debts and liabilities of over $60M while Dist. 200 is also over $60M. THESE ISSUES NEED TO BE ADDRESSED!

Q from Oak Park  

Posted: July 1st, 2012 1:50 PM

Cdonovan2, I think people may want to pay more attention to John Hedges who has concerns saying he has heard the same stuff year after year, and nothing has been mentioned about not having the 94 million dollars to fund Pension liability. Are real costs being pushed on the back burner that Lesner might be doing? A local paper should be able to do some work on finding out what is going on with the 94 million dollars.

Cdonovan2  

Posted: July 1st, 2012 1:22 PM

Q: This information was in the special section of the Tribune, and it is the report issued by Cook County, "signed" by Preckwinkle and Treasurer Pappas. Under the heading "Total Unfunded Pension Liability" the amount is "$94,722,712". Reporting further that the "% Funded" is "57.05". Meanwhile the "% Funded" for District 97 is "42.39%", and District 200 is "68.98%", with the Park District having ?.53%". The vagaries of this should be discussed; how will the deficencies be funded?

Separated At Birth  

Posted: July 1st, 2012 11:42 AM

David Pope & Jeff Daniels ?

Q from Oak Park  

Posted: July 1st, 2012 10:50 AM

Cdonovan2, are you sure the Tribune is correct? Pope says it's a clean audit and this story doesn't mention anything about 95 million dollars.

Cdonovan2  

Posted: July 1st, 2012 10:35 AM

The Sunday Tribune had a special section with information pertinent to the discussion of the Village budget. According to the information released by the County, the Village pensions are funded to less than 60% of the liability. The shortfall nearly $95 million. Unlike the schools, the municipal pension fund won't receive a match by the State. It is all on property owners. What will this do to the Village budget projections, and where will the money come from? Taxes. Schools will ad more.

Q from Oak Park  

Posted: June 29th, 2012 4:26 PM

SOP Box Sally from Oak Park, you may not be aware of no public official can give away a sidewalk for private business. Of course they did get away giving the land at Forest and Lake street away, so not sure how well a sidewalk would stand up to the Sertus give away. Then one think to know SOP Box Sally, when you let pigs do what they want, they become hogs, and you know what happens to hogs.

SOP Box Sally from Oak Park  

Posted: June 29th, 2012 4:20 PM

Silly Q from Oak Park - Do you not know that some pigs are more equal than others? It's probably quid quo pro for Mary Jo's support for the South Marion Street redo. Only killed one business and wounded a baker's dozen on S. Marion.

Funky  

Posted: June 28th, 2012 10:56 PM

Is it weird that Lesner hired a member of the auditing team to be his Deputy Chief Financial Officer? Any more checks under $25,000 being cut by Lesner without the board's approval?

Q from Oak Park  

Posted: June 27th, 2012 5:02 PM

Mares from River Forest Cont... Because someone donates or starts an organization, which in itself has a lot of advantages when you want politicians on your side, doesn't mean it entitles anyone to special treatment of any kind, and especially when tax payers are being taken advantage of. If her niece uses a chair, it is not a pleasant experience going through the center of a business trying to access a sidewalk. Mares, can I have a bar b que on your lawn if I help better someone else?

Q from Oak Park  

Posted: June 27th, 2012 5:02 PM

Mares from River Forest, my goodness, that Mary Jo is such a wonderful person to help out with giving money but that has nothing to do with her business at Marion and South Blvd.. Research and find the majority of charitable organizations start by people who they themselves or a close family member has been effected by what the organization is about. Cont....

Q from Oak Park  

Posted: June 27th, 2012 5:01 PM

Laughing, you are wrong. You don't give a person the right to do what they want over the good of the people, and in this case it's taking away a public sidewalk. Ask Mary Jo to change the building so the outdoor cafe can be on her property. She will not do that. That would take away her own space and she won't give that up, but she will take a public sidewalk if she can, and she has it at the moment, but I like to believe in right over might.

Mares from River Forest  

Posted: June 27th, 2012 2:56 PM

@Q. Please read. Good day sir. http://www.oakpark.com/News/Articles/08-10-2010/Good-hearted_capitalist

Laughing  

Posted: June 27th, 2012 2:50 PM

I think the owner of MSC has given ample amounts of her money back to the community. I have no idea what the arrangements were regarding the outdoor set up, but it certainly brings in more revenue for the Village as people dine and pay taxes.

Q from Oak Park  

Posted: June 27th, 2012 10:41 AM

Has anyone gone by the cheese place at Marion and South blvd.? The village used tax payers money to build the 5 million dollar street and gave the cheese store the right to build on the public sidewalk. Are taxpayers sharing in the profits? Stop by the cheese shop and ask for your share of the profits.

Permit Purchaser from Oak Park  

Posted: June 27th, 2012 9:38 AM

The "parking funding problem" is being solved on the backs of those to who need to purchase parking permits. The Village overbuilt the parking garages and rather than charge the users of the parking garages, the permit fees for everyone who doesn't own a garage has skyrocketed. Great problem solving on behalf of the Village! Cara should be proud!

500 lb Gorilla from Oak Park  

Posted: June 27th, 2012 9:16 AM

Wouldn't the parking fund problem be solved if OPRF just paid us back for the finanical catastrophe of a parking structure that we built for them?

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