Oak Park searches for another million in cuts

Budget in 2019 would limit tax levy hike to 3 percent but dip into reserves

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By Timothy Inklebarger

Staff Reporter

The Oak Park Board of Trustees continued its work on the 2019 budget, but it's effort to keep the property tax levy increase at 3 percent will likely be a temporary fix.

Trustees are spending down cash reserves to hold the line on what would otherwise be closer to a 10 percent increase on property taxes next year.

It's a temporary fix because those reserves, once spent, will take time to replenish. That could happen through increased revenues or reduced spending.

Trustees discussed the tactic at a special board meeting at Oak Park Village Hall on Monday, Nov. 12. They directed Village Manager Cara Pavlicek and Chief Financial Officer Steven Drazner to go back to the budget and find at least another $1 million in cuts, if not more.

The proposed budget, which has not been approved by the board of trustees, notes that about 65 percent of the general fund is used to maintain the police and fire departments. Roughly 75 percent of the budget goes towards salaries and benefits for all municipal employees – that rounds out to about $62 million in the budget.

The recommended 3 percent increase to the tax levy equates to a revenue increase of about $960,000 over the prior year. The proposed budget would spend about $2.1 million from budget reserves. That would reduce the general fund balance from $12.7 million to an estimated $10.5 million.

"It is unlikely that the village can continue to limit property tax increases to 3 percent annually going forward unless there are increases to other revenues (such as sales tax or similar), there is a dramatic reduction in non-core service support (e.g. property tax support for grant funding agreements or services provided to other taxing bodies) or there is a dramatic reduction in core municipal services," the budget notes.

At the Monday board meeting, trustees lamented the reality that spending down budget reserves was a temporary fix and that a structural change needs to take place.

"Business as usual is not going to cut it going forward," said Trustee Dan Moroney, who pointed out that without spending down reserves the tax increase would be much higher.

"That works for this year, but we don't have that tool every year and eventually when we can't use that tool a levy could be much higher," he said.

He said it is not a criticism of village staff but referred to the tactic as a budgetary "trick."

"I would like us to look at what a budget would look like if we didn't draw the $2.1 million from the fund balance," he said.

Trustee Deno Andrews agreed, calling on the board and village staff to explore reducing the budget by $2.1 million to have a true 3 percent levy increase and not one accomplished through reliance on budget reserves.

"I have a lot of interest in seeing what $2 million less looks like," he said.

Trustee Bob Tucker said the move to use budget reserves is "not a trick" but a strategy that might be recouped through unforeseen future revenues. The property transfer tax revenue through the sale of large buildings downtown, for instance, can unexpectedly net the village hundreds of thousands of dollars. The sale of the 21-story Vantage apartment building at the beginning of 2018 resulted in tax revenue estimated to be over $800,000 for the village, for example.

Tucker added that it is the board's fiduciary duty to examine every program and every partner agency – such as the Oak Park Housing Center and the Oak Park Economic Development Corporation – every year to find efficiencies. He added that an unexpected pension increase of $600,000 hit the village budget.

"We need to examine why the (levy) increase is happening and perpetuates itself over the coming years," Tucker said. "The current pension hike may or may not be there in future years in terms of that jump."

He noted that while the village is often criticized for the seemingly ever increasing tax burden, the taxing body has reduced its number of full-time employees by roughly 100 people over the last decade. That's roughly 20 to 25 percent of all municipal staff, Tucker noted.

Many of those positions have been eliminated through outsourcing to private companies and temp agencies and through attrition, said Pavlicek.

Moroney noted that the salary increases for police and firefighters is a large driver of the increasing tax burden. The police department is planning to hire 10 additional officers to be fully staffed. Pavlicek noted that police already are paying overtime to existing officers to have enough officers on the streets.

Interim Oak Park Police Chief LaDon Reynolds acknowledged that more staff would reduce the overtime hours paid to cops. "Whether we're down 10 (officers) or five, we're going to provide safety for the community," he said.

Mayor Anan Abu-Taleb said every percentage point of increase to the levy equals about $300,000 more needed from Oak Park taxpayers, so a 3 percent increase is roughly $900,000 needed to pay the tax bill.

Holding the line on police and fire hires would save about $2 million and $800,000, respectively, he said, gaging trustees' interest in exploring cuts in those areas of the budget.

"I'm not suggesting I'm going to recommend this to this body," he said, but noted that reductions in those areas would go a long way toward solving Oak Park's structural tax deficit.

He said it takes about $14 million to run Oak Park Village Hall, outside of public safety costs. "Is there an appetite for this board to address the elephant in the room, which is police and fire and public works (expenses)?" he asked.

Andrews suggested the board instead focus on potential cuts to partner agencies instead, such as the Oak Park Economic Development Corporation, Oak Park Housing Center and the Oak Park Arts Council, to name a few.

"I say we tighten our belt and make cuts here and there," he said.

tim@oakpark.com

Reader Comments

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Ramona Lopez  

Posted: November 19th, 2018 12:21 PM

I agree Jeffrey. Corporate welfare is alive and well in Oak Park. If Oak Park is so desirable and such a great place to to business and live, then allow the market to determine that, NOT some gov't bureaucrats who love to give away other people's money.

Jeffrey Smith  

Posted: November 18th, 2018 5:26 PM

When you put the public good in the hands of venture capitalists and real estate executives, and when elected officials sell out to people like that, financial catastrophe for the community is inevitable. But thanks to the current Board's complete acquiescence with the financial sector any semblance doing things for the common good will go right out the window.

Jim Frenkel  

Posted: November 15th, 2018 1:16 PM

See this for why the middle schools received an "underperforming" rating. The mystery to me is how the elementary schools that feed into the middle schools are all either "commendable" or "exemplary." Under the section, ISBE designation, they explain "Brooks Middle School has an underperforming designation based on the performance data for our low-income, our IEP and our African American student groups." http://www.op97.org/brooks/middlematters/

John Kehoe from Oak Park  

Posted: November 15th, 2018 11:43 AM

How does the board even utter the words "tax increase", when the front page article of this very issue is of yet another high rise being proposed to ltower over Frank Lloyd Wright's Unity Temple? We constantly hear from this board about how the high rises will keep tax increases at bay. Someone is using holly numbers to sell their agenda.

Bruce Kline  

Posted: November 14th, 2018 3:18 PM

Alice: Obviously. I would suggest 20 ... at least. Now you and I are finally both with the program.

Alice Wellington  

Posted: November 14th, 2018 2:05 PM

Bruce Kline - Obviously, this calls for higher taxes and at least 10 or 20 additional administrators at D97. Anything for the children!

Bruce Kline  

Posted: November 14th, 2018 1:44 PM

Alice, you're not nice. D97 spends more money on our schools than most. Why would you point out such an inconvenient fact and make so many of us uncomfortable?

Alice Wellington  

Posted: November 14th, 2018 11:50 AM

Don Anderson - no they don't. Not anymore. Our two middle schools were just rated "underperforming". https://www.chicagotribune.com/suburbs/oak-park/news/ct-oak-isbe-designations-tl-1108-story.html

Christopher Goode  

Posted: November 14th, 2018 8:52 AM

Drop the Madison Street revamp entirely. It is a colossal waste of money without any real net gain. That should save a few bucks.

Don Anderson  

Posted: November 14th, 2018 8:21 AM

We are on the glidepath where literally be leaving the village will be able to afford to provide his police and fire protection. Meanwhile D97 and D200 provide platinum plated educations to the rare few who can afford to live in Oak Park and send their kids to the schools.

Jeffrey Smith  

Posted: November 14th, 2018 2:06 AM

Klara - agree 100%. There's gold in them thar parking violations.

Jeffrey Smith  

Posted: November 14th, 2018 2:05 AM

Maybe if mayor mini-me and his minions would stop giving away millions in tax dollars to "developers" he wouldn't be scrambling to cut services now. Because we all know it's going to come out of areas that serve the needs of the community as a whole.

Neal Buer  

Posted: November 13th, 2018 10:03 PM

Bring the Oak Park Economic Development function in house. This entity is solely funded by the village, and acts like a village department.

James Peters from Oak Park  

Posted: November 13th, 2018 9:26 PM

There's a quick explanation of the levy issues and how citizens can tell the Village board they don't want deficit spending. Go to oakparkinthemiddle.org

Klara Gabor  

Posted: November 13th, 2018 5:08 PM

Not that they are not nice individuals do we really need Community Service Officers who have no police powers? Also, where is parking enforcement hiding? Just around the area of Chicago Ave. to Lake, Austin Blvd. to Lombard there are numerous cars parked overnight which I don't believe have passes as they are there too many nights and, cars with expired or no village stickers. Aside to being unfair to residents who abide by the rules that is lost revenue and considerable lost revenue. Let's not forget also the residents with cars parked in the alley well over the apron of their garages which is another violation.

Tom MacMillan from Oak Park  

Posted: November 13th, 2018 4:42 PM

Lets do the dramatic reduction in non-core service support. Life will go on with those cuts.

Mike Hanline  

Posted: November 13th, 2018 3:11 PM

It the seven years I've owned property in Oak Park, my property taxes are up nearly 30%. You know what isn't? My annual income...

Al Rossell  

Posted: November 13th, 2018 2:52 PM

Maybe we can get the 3,000,000 cash back on the Oak Park and Madison land deal and maybe we could sell the land instead of giving it away. Also what happened to the surprise transfer tax money that came in from the vantage building sale or the target sale. The transfer stamps were substantial. Guess that just disappears with this current board. If they were following the budget it would be surplus money and could be used for this next budget. Maybe we could forgo the road diet on Madison street as well. Save us a few bucks.

Bob Pawlowski from Oak Park  

Posted: November 13th, 2018 2:23 PM

Don't they have more pressing matters to attend to? Like narrowing busy streets and where the next high-rise will go?

Alex Garcia  

Posted: November 13th, 2018 2:23 PM

Not one mention of the possible steps the village could take to increase its tax base. Oak Park and Cook County's populations are declining. All too often, Oak Park businesses find the environment friendlier in neighboring municipalities. So yes, the village needs to change its approach, but not in the way that's been described here. You don't increase your base by piling on to the current and future tax burden faced by residents and businesses in the forms of increases to the state's income tax, likely increases to the gas tax, uncompetitive sales taxes, property taxes that are already among the highest in the country, and the last bastion of the desperate policymaker, ie new fees for every concievable activity.

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