A few weeks back I wrote an article here making the case for a 0% tax levy increase for our village budget and we now have a budget reflecting that. Thanks to the village staff for being responsive to this request, making our community a little more affordable now and over time.
At the same time, we are expanding our general fund expenditures by $3.7 million in 2023. This is a significant jump. There are several strategic and unavoidable spends that make up this increase as Village Manager Kevin Jackson builds an organization that is responsive to our board goals in an inflationary environment. While this level of spending increase often resurfaces in future years as a big tax levy increase, early projections by Village CFO Steve Drazner indicates a deficit-free 2024 budget with a less than 3% levy increase.
If we look closer at the spend, a large portion ($2 million) of the increase is supplies, salaries, cost-of-living adjustments and corresponding health benefits. However, a portion ($850K) of the salary & benefits increase is a result of an increase of 8.75 people (Full Time Equivalent) to the village staff, taking our total head count to 394. We are spending an additional $1.3 million in external support (leveraging external specialized expertise to help staff).
The increase in village staff includes:
• Expansion to the Village Manager’s Office with an executive assistant and management intern.
• 3 additional firefighters/paramedics for a third fire engine.
• 1 additional customer service analyst
• 1 additional person for graffiti removal and other public works-related enforcement activities
• The Diversity, Equity and Inclusion (DEI) team under the Village Manager’s Office
• Health Department (Farmers Market manager + basic roles to catch up on documentation backlog created by the pandemic). We have converted some of the proposed COVID-related spending into a contingency fund (Under ARPA funds) to be used only if COVID risks truly resurface. This saves us from unnecessarily spending dollars toward a COVID transitionary year.
American Rescue Plan Act (ARPA) dollars have been leveraged to cover eligible lost revenue and community investments. The ARPA balance now sits at $2.1 million. Brisk post-pandemic economic activity/recovery has seen our sales tax and short term rental (e.g. Airbnb) revenue go up this year by $3 million. If this holds, it allows us to pay for more without increasing the real estate tax burden for you. Our operating reserves are over $33 million, over double the recommended threshold. I am also assured by staff that future cost savings are likely as a result of the increased investment in the organization this year. However, with economists predicting a recession in 2023, it behooves the board, staff and community at large to pay close attention to how our sales tax revenues, parking deficits, investments in community safety, sustainability, etc. and expected cost savings evolve in 2023.
Our staff worked really hard on this budget while dealing with many external variables, including a litigation and related public hearing that ate into budget preparation and discussion time. I’m particularly thankful to those board colleagues who engaged in tough but meaningful dialogue on the budget while adjusting to a new curtailed budgeting process.
Budgets are often complex and boring but as board members it’s our fiduciary responsibility to understand and shape the budget to allocate community resources effectively and transparently.
Personally I’m cautiously optimistic about our 2023 budget and how it sets us up for the future.
Ravi Parakkat is an Oak Park village trustee.