To keep tabs on Oak Park’s costs and earnings throughout the year, the village has started producing quarterly financial reports. And over the first three months of 2008, housing related revenues-specifically the real estate transfer tax and building permit fees-have come in lower than expected.
The village expected about $925,000 in transfer tax revenues so far this year, but only took in about $428,000 (over 50 percent less than budgeted). Oak Park charges $8 for every $1,000 in housing transaction value, according to village code.
The village makes the estimation by looking at the previous year’s housing activity and comparing it to the regional real estate market, said Chief Financial Officer Craig Lesner. He also figures in any large property sales on the horizon.
“The art of projection is identifying where you’ve been, which will help tell you where you’re going,” Lesner said.
Also tied to the housing market, building permits came in lower than projected as well. The village took in about $239,000 in revenues, 36 percent less than the expected $375,000.
The dip is partly because of the sagging market, but also expected variances in the numbers throughout the year, Lesner said.
Winter months are typically slower for housing sales, so he expects the figure to jump in the second and third quarters of this year. The increase should make up for the slow start of 2008, but it’s too early to say for sure, he said.
In a meeting earlier this month, Trustee Ray Johnson talked about finding costs to cut and ways to make up for lagging housing revenues. However, Lesner isn’t recommending any action yet, other than keeping a watchful eye on the numbers.
Village Manager Tom Barwin said Oak Park reduced its estimate on transfer tax revenues for 2008 by 25 percent to $3.7 million, anticipating a “sluggish” market. He said even good housing markets are seeing slow first quarters, and noted that the tax is just a small slice of a $90 million operating budget.
“By the time it all sorts itself out, we’re optimistic we’ll come in very near where we projected at the end of the fiscal year,” he said.
Barwin also wants to closely monitor village government’s fuel use as costs continue to climb. He’d like to look into more fuel-efficient police cars in the future.
“We as a village government need to do what any family does in a situation like an economic slowdown or recession,” Barwin said. “You tighten your belt, hunker down and watch your spending carefully.”