Officials look again at budget numbers
Village board expected to approve $20 million spending plan at next week’s meeting
Last updated 12/7/2022 at 2:54pm | View PDF
Stronger than expected revenues in 2022 have created an opportunity for the village to bolster its capital improvement and master infrastructure work in 2023.
“The revenues are coming in really well,” village manager Kathleen Gargano told trustees at a Nov. 30 committee of the whole meeting, which also was attended by members of the village’s finance commission. “The CIP could use a little bit of a boost of funds based on the projects that we have slated for next year and moving forward.”
Staff is recommending a $2 million transfer from the general fund for CIP work and $1.72 million for MIP work.
Income tax revenues are up 41 percent over budget this year for a projected total of $2.69 million. Sales and local use tax receipts have come in $600,000 higher, or 11.5 percent more, than what was anticipated for this year.
“That has been really outperforming projections,” Gargano said of the increase. “It’s been outperforming projections for every municipality — it’s not just us.”
Staff made more conservative estimates for revenue increases in the village’s draft 2023 budget, which is slated to be approved at the Hinsdale Village Board’s meeting Tuesday, Dec. 13. They are projected at $22.6 million, with operating expenses estimated at $20 million.
Most of the village’s general fund revenue — $8.4 million or 37 percent — comes from local property taxes. Other sources — sales and use tax, income tax, utility tax, grants, permits and fees — make up the other $14.2 million or 73 percent.
“Property taxes are our highest revenue source, but we’re pretty diversified,” Gargano said, showing a graph that indicates what percentage of a resident’s property tax bill goes to the village.
“We always like to remind people we budget very well and we’re 7.3 percent — very competitive compared to everyone else with the services you are being provided.”
The village expects to receive $675,000 in grants in 2023 to pay for projects such as improvements to the Highlands Train Station, the police department gun range and other projects.
On the expense side
Expenses are projected to increase about $1.1 million or almost 6 percent in the 2023 budget.
Employee salaries are the largest single line item at almost $9.4 million, up about 4.7 percent from last year.
“A key driver in that is the overtime expenses related to public safety,” Gargano said.
About 3 percent of the 4.7 percent is overtime related to staffing vacancies, she estimated.
Benefits and employee costs are the second largest expense at $4.5 million, with contractual services coming in third at $3.2 million.
Gargano also reviewed spending by department. Costs are expected to increase to $5.2 million (8.2 percent) for the fire department and to $5.6 million (7.3 percent) for the police department. A part of the increase is due to higher fees the departments will pay to Du-Comm, the county’s emergency dispatch service. Those fees will increase 10.3 percent for police and 7.7 percent for fire in 2023.
Parks and recreation costs show the largest projected increase at 10.2 percent, from $1.9 million to $2.1 million.
“They are increasing their programming, so when expenses go up, then we receive additional revenue,” she said.
The budget also has shifted the cost of public service employees who are dedicated to the parks to that department, Gargano said.
The cost of lifeguards will remain higher after the village increased the pay rate last year after having trouble filling positions.
“We’re going to have to keep it at that level,” Gargano said.
The village will see increased premiums next year for the insurance it purchases through IRMA, a general liability insurance pool. They are projected at $478,000, up from $88,000 last year.
“We’ve had a series of bad years and our rate contribution is for a period of five years and we’ve had a bad four years,” Gargano said, pointing to a series of work-related injuries.
Increases in the price of road salt, gas and oil and other materials also affected the budget, Gargano noted. A shortage of squad cars has contributed to an increase in projected repairs and maintenance expenses.
The budget calls for the village to end 2023 with almost $5.5 million in reserves, which represents about 27 percent of budgeted operating expenses.
“We feel we’ve put together a really good budget in terms of meeting an expectation of a minimum of 25 percent reserves and trying to be as conservative as we can with the revenue projections,” Gargano said.