By Anna Lothson
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."