Trustees consider budget for year ahead
Spending plan for 2022 higher than 2021, more revenue expected from property, sales tax
Last updated 12/1/2021 at 5:07pm | View PDF
Hinsdale trustees have signaled their support for an $18.4 million operating budget for 2022.
At Tuesday night’s village board meeting, trustees reviewed the draft spending plan for the upcoming year, which is an increase of $623,449, or 3.5 percent, over the 2021 budget.
About half of the spending — $9.06 million — goes to staff salary and benefits, according to officials. Village manager Kathleen Gargano said a spate of recent departures pushed up those costs in the short-term.
“We’ve had some long-term employees retire, and with that we have payouts for their vacation balances and things like that, and they are significant,” Gargano said.
Fewer such retirements are expected in the next several years.
In her budget presentation, finance director Andrea Lambert told trustees that revenues are projected to be $21.4 million, an increase of just over $1 million, or 5 percent, from 2021. She reported that 37.6 percent of that money comes from property taxes through the annual levy, which is expected to yield about $152,000 more than last year.
“Of the levy, 73.5 percent goes to police and fire protection,” Lambert said.
Village President Tom Cauley noted that the village receives just 7 percent of a resident’s total property tax bill.
“Eighty percent of the property tax goes to the school districts,” Cauley stressed. “We are not a substantial taker of property tax.”
Another 19 percent of village revenue comes from sales and use tax. Lambert said a recent change in Illinois law passing along online sales proceeds to municipalities has been helpful.
“This change has been very profitable for Hinsdale due to the volume of online shopping that’s occurring,” Lambert said. “Amazon and DoorDash and GrubHub, all of those are now showing up on our sales tax returns.”
The village also will receive the second half of its $2.4 million in federal American Rescue Plan Act funds in 2022.
About $3.85 million in spending is earmarked for street and other improvements under the master infrastructure plan. The Garfield Street reconstruction is the single most expensive project at an estimated $2.8 million. Annual street resurfacing will cost $615,000, and $38,400 will be used for the pedestrian bridge over the Tri-State Tollway along 47th Avenue.
In the capital improvement category, the envisioned $1.84 million in expenses includes $580,000 for roof repairs to the police and fire stations, $248,000 for a public services vehicle replacements, $150,000 for historic downtown streetscapes and outdoor dining improvements and $167,000 for pool improvements and maintenance. Grants are expected to cover $225,000 in Highland Train Station upgrades and $200,000 in pedestrian walkway improvements to the parking deck.
In the budget report, officials are projecting a nearly $1.29 million surplus as the 2021 fiscal year comes to a close.
“This variance is attributed the operating revenues significantly outperforming estimates” by nearly $1.5 million, the report stated.
Lambert said the 2022 draft budget also anticipates the village exceeding its target reserves of 25 percent of total spending, a mark critical to maintaining a AAA bond rating.
“We project an ending general fund balance of $5.48 million, which is equal to 29.8 percent of budgeted operating expenses,” noted Lambert, saying that includes pre-COVID-19 spending on infrastructure and capital improvements.
Gargano said officials recommend keeping that 4 to 5 percent cushion in reserves until 2022 unfolds.
“We can make additional transfers to the MIP or use it in other ways if it’s determined to be a good decision at that time,” she said.
Cauley said that was prudent while also expressing a desire to lower reserves to 25 percent, which represents about $800,000, as soon as is responsible.
“Maybe halfway through the year, if we’re trending on budget or favorable to budget, we take a look at the reserve balance and see if we can deploy some of those monies to some use,” he said. “I don’t want to end with a 35 percent balance if we only need 25 to satisfy the rating agencies.”
The budget is expected to be approved by trustees at their Dec. 14 meeting.