There was good news and bad news at the Oak Lawn Village Board’s first 2014 budget meeting on Wednesday evening.
The good news: Oak Lawn saved $1.5 million – about $79 per household – through electrical aggregation.
The village also saved residents a total of $685,696 by changing waste haulers during the past year. And there was even talk of a possible $1 million property tax rebate for residents.
The bad news: the cuts and savings will barely make a dent Oak Lawn’s $8.7 million deficit before the village board can pass a balanced budget at the end of the year.
While there were no big reveals at Wednesday’s meeting about layoffs, property tax hikes or possible outsourcing of village services -- such as the 911 dispatchers -- Village Manager Larry Deetjen warned that those options would be on the table at November’s budget sessions.
“We’re looking for feedback from the policy makers in this room for additional recommendations,” Deetjen said. “The numbers are big. In order to get a balanced budget we’re going to have to make tough decisions.”
Proposals to increase revenue include expanding the red light camera system to generate $200,000 in additional revenue. Oak Lawn currently has four red light cameras around the village.
There was also talk about increasing fees for video gaming licenses, video gaming machines and gaming licenses that would generate an additional $70,000.
Although hiring additional firefighters and paramedics is off the table, the village could also help balance the budget on the backs of fire and rescue personnel by increasing ambulance and other fees.
“We made a conscious decision to reduce sworn firefighters,” Deetjen said. “Management and I haven’t seen eye to eye in this area.”
Since an August board decision not to fill twelve vacant positions, eight of which are funded by the general operating fund, cutting those positions has saved village taxpayers $500,000.
Village managers have proposed another round of cuts in expenses, which Deetjen said have resulted in another $1 million in savings, such as changing health insurance carriers and possibly eliminating the summer help program next year.
Increasing municipal utility taxes added on to residents’ utility bills could help fund retired employees’ health insurance until they become Medicare eligible.
And don’t knock possibly selling off Oak Lawn’s most valuable asset, the village’s waterworks, which have been assessed at $155 million.
To meet the state-recommended levels for unfunded pension liabilities, Village Treasurer Pat O’Donnell has sounded the mantra increasing the village's contributions to employees’ retirement funds.
Should the village continue to “kick the can down the road,” O'Donnell warned that Oak Lawn could risk the state withholding sales and income tax revenue by putting those monies into the village’s state-regulated employee pension funds beginning in 2016.
O’Donnell has suggested a payment $5.034 million; last year, the former village board opted to put $2.4 million into its unfunded pension liabilities.
Another possible solution for to the village’s pension liability is to take out a pension bond “but I’m in no way suggesting this,” Deetjen said.
Bond debt is not bound by state statutes, which require municipalities to pass balanced general operating budgets at the end of each year.
Trustee Bob Streit (Dist. 3) took issue with $7 million budgeted for infrastructure in 2014. He suggested funding infrastructure and pension liabilities by taking out bonds.
“In one breath we’re going to lay people off, in the other breath you say we’re going to spend $7 million on infrastructure,” Streit said. “Let’s look at it as an alternative to layoffs and outsourcing … you’re saying debt like it’s a bad word.”
O’Donnell said the village needed to focus on passing a balanced budget first and then look at ways to decrease bond debt.
“That’s why Detroit went bankrupt,” the village treasurer said.
Village officials also discussed a proposed $1 million property tax rebate to property owners, that would be flipped into increased water and sewer fees at an estimated cost of $64 per household.
An audience member named Joe pointed out that water and sewer fees can’t be deducted from one's tax return, like property taxes.
“Is this political,” he asked.
Saying that is was just an idea, Deetjen cryptically added: “Our largest employer in this community doesn’t pay property taxes, but sewer and water taxes are paid by the largest employer, as they should.”
After the meeting, Mayor Sandra Bury said she was hoping for more input from the village department directors.
"We need as much info as we can before we make decisions," she said. "I see a little progress but I don't see a path to get there."
The next budget planning session is scheduled for Nov. 6.