Capital improvement projects, competitive salaries and benefits, and already agreed upon goals for the fire and police pensions could lead to a property tax levy increase of up to 9% for the village government, according to village Chief Financial Officer Kevin Bueso. Oak Park’s village board will still have multiple opportunities to reduce that increase by making hard choices.
Oak Park’s village finance department is doing a deep dive into its financial framework to review, update and strengthen policies that direct its overall standard operating procedures.
At the finance committee meeting on Aug. 6, Bueso and Deputy CFO Louis Hall-Makarewicz presented drafts for the tax levy, investment and external agency policies.
This is just one piece of the larger FY2027 budget process puzzle. A finalized budget proposal is typically shared with the village board to discuss in October before additional public input and a final vote in November.
The village board members on the committee voted to recommend the tax levy draft to the village board but kept the investment and external agency policies for further discussion before they are ready to move forward.
Tax levy policy
The tax levy draft policy outlines a recommended framework for the finance department to follow when creating its overall budget presentation but does not represent the tax levy itself as that is a decision made by the board.
The draft states the intended purpose is to “support structural balance, align recurring revenues with recurring services, fund legal and contractual obligations, advance board goals and priority projects, and clearly communicate the effect of the levy on taxpayers.”
The recommended structure in the policy outlines a 3-option presentation with the planning floor, a 3% levy hike, the planning ceiling, greater than 5%, and a middle option. Any levy adopted outside of the range would need to include additional information like the reason, taxpayer impact and a five-year funding plan according to the draft text.
“What this is allowing us is saying we’re going to come back to the board with a proposed tax levy with these scenarios, and saying if you approve as a board 3% this is what it will get you. If you approve a 5%, this is what will get you,” said Bueso.
Oak Park’s policy levy is comprised of four purposes: debt service, fire and police pensions, corporate operations and the public library. As one purpose increases, it has to even out at the cost of another. The village has committed to fully fund the police and fire pensions by 2040, so that amount is already set for future planning, said Bueso.
The Oak Park Public Library is managed by an independently elected board but its tax levy is run through the village government.
Bueso outlined other 2027 budget increases that will add pressures to the levy such as a 3% increase in staff salaries from an already approved union agreement.
“Running some numbers right now in order to maintain our level of service and add on a few of the programs and initiatives that I have mentioned, this levy would have to go to about 8.5 to 9% in order to meet those demands,” said Bueso. “Or look at then reducing the scope of those initiatives and those services or reducing what the main level of service that we are providing as a governmental unit, what that would look like.”
The increase does only account for a small portion of the total property tax levy as Oak Park Elementary School District 97 and High School District 200 make up the majority.
President Vicki Scaman, who attended the meeting via Zoom, pointed out that the board has had the most consistent, lowest levy increases in modern history, since she was elected in 2021.
In 2023, there was a 0% increase in the tax levy which created somewhat of a deficit that would require almost double-digit increases to make up said Bueso.
“We levied zero because we could, because we didn’t need the levy, and I understand the impacts for subsequent years, and you know, we levied because we didn’t need more money,” said Trustee James Taglia who was on the board in 2023.
The whole village board will discuss, review and vote on an actual levy increase percent at a later meeting this fall.
“We have to make the difficult choices,” said Scaman.
Investment Policy
The only public comments heard at the meeting pertained to the proposed investment policy calling for the village board to divest from banks that support other organizations they do not feel aligned with village values.
Current investments include about $58 million in Huntington Bank and $5 million in Byline Bank which is structured through a certificate of deposit ladder across more than 200 banks.
“Village residents are becoming concerned as we learn that some of the bank holdings village investments fund fossil fuels, private prisons, and ICE detention centers, war profiteering, and firearms,” said Dean Christ at the meeting.
A statement written by Annie Wilkinson and read by Nedaa Alwawi cited three major banks, Citigroup, Goldman Sachs and JPMorgan, that are included in Oak Park’s direct fund investments through Byline Bank as specific examples to divest from.
These banks have historical ties to private prison industry leaders GEO Group and CoreCivic which manage the majority of ICE detention facilities currently.
“We have to put our money where our values are,” said Pam Tate, a core organizer for Oak Park Climate Action Network.
The draft policy includes background information outlining explicit value-based language Trustee Derek Eder shared outlining “racial justice, economic justice, human rights, LGBTQ rights, public health and safety, peace, and environmental sustainability,” as priorities to guide investments.
Elements of the language were incorporated into the policy in ways that adhere to the Illinois Public Funds Investment Act and Sustainable Investing Act, but the finance department asked for more guidance to clarify the divestment and decision-making processes.
Eder suggested at the meeting that the policy could take the state language saying sustainability factors will be considered a step further by clearly stating it will be upheld, not just a factor.
Another overall suggestion was to make the outlined quarterly reports more frequent with monthly reports.
Bueso said the staff’s approach is to leave the policy broader and outline more specifics in the Standard Operating Procedures that will follow. He also confirmed that the investment platform has the capability of divesting from certain CDs to align with the final policy though it may take time to transition.
“It’ll take a bit of time for us to divest from these companies, so we’re probably going to add asking a bit of time to do that, and that’s probably going to be anywhere between 90 to 180 days,” said Bueso.
External agency policy
The Village of Oak Park gives financial support to external agencies, also referred to as partner agencies or outside organizations, through grants, contributions, loans of local funds and various other avenues as part of each year’s budget.
External agencies are defined as “any non-profit organization, sister government entity, or other outside organization that requests or receives discretionary village funding under this policy” by the village’s fiscal structure and policy manual.
For many years the village has provided funding to these agencies which include support for the arts, tourism and housing.
The proposed policy adjusts the structure of funding to a one-year basis allowing for an annual review by the board instead of the multi-year contracts that are currently common practice. This change would make this process similar to the annual appropriations process individual departments already follow.
“The primary purpose of this document is to establish a consistent and transparent framework for evaluating and approving discretionary village funding requests from outside organizations,” said Hall-Makarewicz, “Our goal is to prioritize single-time, well-justified assistance over recurring commitments.”
The draft policy does not mean funding on a multi-year basis is out of the question and serves more as a framework for consistency and transparency in the process of allocating these funds. The transparency would be a two-way road by giving a clearer understanding of the metrics used to make funding decisions and allowing the board to have a clearer view of the needs of each organization.
The current multi-year agreements will not be impacted until it is time for renewal, confirmed Bueso at the meeting.
The finance committee did not vote to refer this draft to the whole board just yet, as there were multiple points of clarification requested to be implemented before it is finished.
“I wouldn’t want this policy to create uncertainty in those partner agencies around our commitment to continuing those relationships,” said Trustee Brian Straw.
Revisions that will be made include tightening the definition of external agency and exploring a tiered review system to differentiate the process between multi and one-year requests.
“The intention is to make the review part of the annual process, not necessarily to change any of the funding decisions that are being made, just to create a space to have conversations with the board,” said Hall-Makarewicz.