By Igor Studenkov | For the Bugle
The Niles Finance Committee got a first look at the village’s fiscal year 2017 budget during its March 15 meeting.
The budget is currently projected to have a $984,300 deficit, due to the new software. There is also some uncertainty related to minimum wage, as well as some of the costs related to switching water supply from Chicago to Evanston. But overall, the village officials said they tried their best to keep the costs down.
The presentation was the first proposal; throughout April, the village trustees will review it, and figure out what, if anything, they would need to change. Once that happens, the budget will go before the residents for review. The public hearing is April 25, right before the regularly scheduled board meeting. Niles trustees are expected to approve the final version in May.
Village Manager Steve Vinezeano said that the new software was necessary due to a “meltdown” in the finance department a year earlier. Niles Finance Director Jeff Martynowicz told the committee that the staff was actually able to whittle down the deficit considerably from the original $5-6 million estimate.
“If it wasn’t for that [software] expense, we would’ve been able to bring you balanced budget,” he said.
Martynowicz said the budget proposal was completed before the City of Chicago announced a 1.83 percent water rate increase. The staff was currently proposing keeping the Niles water rates the same and using the water fund surplus to make up the difference And he noted that, because the Cook County Board of Commissioners has been considering a minimum wage increase, the village board would need to decide whether to increase the amount budgeted for salaries just in case.
Martynowicz’s presentation touched upon the village revenue, noting that most of it came from “other taxes” – a broad category that includes the sales tax, the Niles share of the state income tax revenue, a tax on goods purchased outside Illinois, a telecommunications tax, gasoline tax and, for the first time in the village’s history, a video gaming tax. On May 24, 2016, the village board repealed a ban on video gambling. It is expected to bring in $207,360, which would account about 0.24 percent of the total village revenue. The number was calculated based on the 48 video gaming terminals that are expected to be operational by May 1, which each expected to generate $360 a month.
“We’re pretty confident, based on what were seeing, that $207,360 is accurate number,” Martynowicz said.
He then went on to discuss how the village would spend the money it raised. The proposal calls for the general government to reduce its expenses through “re-alignment of positions in General Government, Legal and Personal.”
The Niles Fire Department will be able to hire six new firefighters thanks to a $875,000-a-year Staffing for Adequate Fire and Emergency Response (SAFER) grant. The new hires would also allow the village to cut $514 in overtime expenses. The grant would last for two years.
Vinezeano explained that the village would study whether having more firefighters would offset the overtime expenses – and, if so, it may consider making at least some of the new hires permanent.
For community development, the budget calls for spending $50,000 on the village facade/business reimbursement program, and $70,000 on village marketing.
For public services, Mary Anderson, the department’s director, said that she wanted to spend more money on custodial services.
“It’s much better service, much more high quality service we have been able to get [before],” she said. “The low bidders disappointed us time and time again.”
The department also budgeted $2,585,000 for water main improvements, $420,000 for sewer-related repairs and $370,000 toward designing a new stormwater detention at 9101 Greenwood Avenue, and demolishing the existing structures.
One issue that continues to loom over the budget is the fire and police pension funds, which are currently 42 percent funded and 40 percent funded, respectively. The total net pension liability is currently $93.2 million. Still, Martynowicz said he is optimistic that the situation will improve.
“I expect to see good rates for this year, with equity markets being what they are,” he said.
The budget calls for 48 percent of the village’s contribution to be paid though property tax revenue, and the other half coming from the existing General Fund reserves, sales tax and Niles post office rent.
Committee member John Johann noted that one of the reason the reserves are there is that the village didn’t pay its share in full in the past, so using it now made sense to him.
On the longer term, Martynowicz said that he and Anderson will be working on developing a capital project plan.
“Mary and I will be working on capital budget, a five-year type program, so we can get a feel for what needs to be funded,” he said. “Our goal is to get started on summer and fall, and to have capital budget to this committee late fall-early winter.”
The Finance Director is also proposing a major change in the village services–getting rid of village vehicle stickers. He argued that the $630,000 they are expected to bring isn’t worth the time it takes to process payments and issue stickers.
“[Getting rid of vehicle stickers] would slow down foot traffic in the Finance Department and other areas, and make the Finance Department more efficient, especially during summer time, because it would free up our staff,” Matzynowicz said.
He said that it won’t be part if this year’s proposed budget, but he said it was something the village should consider further down the line.
The village board meets on April 6 and April 11 to review the budget. An additional April 12 meeting has been scheduled just in case the trustees need more time.