The economic toll of the COVID-19 pandemic has prompted the village of Oak Park to examine potential financial cuts to remain solvent. During a June 8 board meeting, village staff presented just over $17 million in recommended reductions by department and village fund. The village board did not approve any of the recommended reductions that night; a budget ordinance, drafted by staff, will go to the village board for a vote on June 15.
“Tonight is more for us to understand if there’s consensus of board direction,” Village Manager Cara Pavlicek said during the meeting. The subsequent discussion led to one contentious exchange.
Trustee Simone Boutet wanted to examine possibilities related to reductions related to staff pay, which, she said, took up about 80 percent of the village budget.
“We have to look at our org chart,” she said. “I don’t see any other way around it.”
Boutet said her husband, a municipal attorney for different towns, has been coming home depressed every day because he has had to issue layoff notices,
“It’s not what anyone wants to do but it’s what’s happening all around us,” she said, adding that the board needed to take a “hard look” at staffing and its configuration for any inefficiencies.
“And also, not pay people if they’re not actually working,” said Boutet. “They probably would make more if they’re on unemployment anyway.”
Mayor Anan Abu-Taleb wanted to know what she meant by not paying staff when they weren’t working.
“We were paying our staff when they weren’t at work. I think that’s wrong,” Boutet said.
Village staff who could not perform their jobs due to COVID-19 were still paid during the shutdown period.
“If people are off, we could either burn up their vacation, burn up their sick leave,” she said. “If you look at what the park district did, they are not paying their people because their people are not actually going to be lifeguards this summer; they’re not going to actually be teaching camps this summer.”
That is not true as the Park District of Oak Park will have summer camps at 13 of its locations, necessitating staff supervisors.
While it is difficult not to pay staff, Boutet said, it was “the only responsible thing to do because we pay people to provide us services and if they’re unable to provide us services … you know, it’s not pretty.”
Moroney said Boutet was making a false equivalence in comparing lifeguards to village staff.
Boutet responded that if the village had laid off staff during the COVID-19-induced shutdown, staff would have gotten paid by the federal government and not by taxes taken from Oak Park residents.
Trustee Arti Walker-Peddakotla disagreed saying, “It is nobody’s fault that COVID happened and people had to stay at home and work. I think, if employers can continue to pay their people, they absolutely should because we are facing a financial and economic crisis of unimaginable proportions. Firing people right now, in my opinion, if we can avoid it, we absolutely should try to avoid it. We don’t want to put anybody out of their homes and on the streets.”
She said there were worker-friendly options available for the 2021 budget that would still save the village money and suggested the board look into offering early retirement programs for staff.
“Those are worker-friendly and we’re not penalizing people and saying, ‘You’re going to lose your job because of a pandemic,'” Walker-Peddakotla said. “I understand we’re in a tough position, but I’m also grateful that we’re not cutting a whole bunch of people’s divisions right now because I don’t think that’s what we should be doing as a village.”
The mayor agreed with her, saying, “We owe it to the good people working for the village to do everything we can to provide jobs, but we should also have high expectations for them to do a good job for our taxpayers.”
Many of village staff’s recommended reductions came in the form of money that would have gone toward training conferences and services that were subsequently canceled or postponed due to COVID-19.
To ease the financial burden of the pandemic, the village has also ended contracts with third-party service providers, including the social enterprise program Cleanslate, which helps people get out of cyclical poverty, has provided Oak Park with professional litter abatement, graffiti removal, landscaping, and other services since January. The Public Works Department ended its year-long contract with Cleanslate in April.
Other recommended reductions included $72,000 from the police department’s budget. A portion of that came from the cancelation of a police forum for command staff. The police department also saved about $43,000 on crossing guard services for District 97 due to the switch to remote learning.
School resource officers were transferred to the afternoon police watch, where the department could use extra support as it is the busiest police shift.
The village also recommended deferring the implementation of Greenways, a project to make streets safer for pedestrians and cyclists, to coincide with other construction projects. Greenways is listed as Bikeways on the proposed budget reduction document; the village had budgeted $165,000 for it.
Walker-Peddakotla was pleased to see that the village recommended no cuts to the Public Health Department for the remainder of 2020 but wanted to see the department’s expenses for this year, as well as projected expenses for 2021.
“There’s a memo that’s part of this item but it doesn’t go into a lot of detail. It’s more general,” said Oak Park Chief Financial Officer Steve Drazner.
The information in its entirety was not included in the agenda documents, due to certain unknowns related to financial grant applications and reimbursements.
“There’s a number of moving parts with grant reimbursement. We brought in some contractual folks that have been funded with grants,” said Pavlicek.
The village has yet to receive some of the documentation from grants applied for by the health department.
According to the village manager, the biggest public health expense during COVID-19 crisis has been contact tracing and Public Health Director Mike Charley has applied for a roughly $800,000 grant to cover those expenses.
“We may see increases in COVID cases in the fall,” said Walker-Peddakotla. “It would be a good sort of analysis to figure out what the projected expenses might be if we had to increase them again.”
Trustee Dan Moroney raised concerns over COVID-19’s effect on the village’s fund balance. Drazner forecast a $10 million reduction in village revenue.
“We’re going to be drawing down our fund balance on major assumptions in this by about $9 million,” Moroney said.
With the recommended expense reductions, he added, the fund balance would be about $5 million by the end of 2020.
“That’s assuming my revenue forecasts are accurate and since I don’t have real data since this pandemic started that’s really an unknown at this point,” said Drazner.
Moroney wanted to know how much the village would need to levy to return to that fund balance.
Drazner said the fund balance policy is 10 to 20 percent of the village’s annual expenditures, approximately $6 to $12 million, with about 60 percent of that money in cash.
On the low end, Drazner said, the village would have to add about $1 million in revenue.
“We’re really going below our policy and putting our backs up against the wall here. It’s important to remember the position we’re in,” Moroney said. “We want to spend on everything, but we’re going to have to levy a lot if we want to accomplish all these things. The taxpayers I talk to, they don’t like that.”
Drazner said people needed to look at the cuts by fund but also by cashflow.
“The cuts we’ve recommended are accomplishing two things. We’re trying to reduce our cashflow out of the general fund but even with all those cuts, we’re still going to use up approximately $9 million if my revenue projections are fairly accurate,” said Drazner. “But we’re also making a number of cuts to the CIP which will allow us to issue less bonds, which is going to translate to less interest expense.”