Flossmoor is going to have to find a way to deal with some financial challenges in the years to come, and the idea of enacting a housing tax to solve them is a no-starter for the current village council.
These were the main points of discussion on Tuesday, January 19, at a postponed regular meeting of the Flossmoor Village Board of Directors, as it outlines a five-year financial projection for the 2021-2026 fiscal years.
The presentation, led by village manager Bridget Wachtel, noted that Flossmoor can expect operating deficits from fiscal year 2022 and an increase in those annual deficits to $ 1.2 million from here fiscal year 2026. The Wachtel report noted that these figures are based on a “conservative” approach to budget projections – which assume no capital improvements – and illustrate “a long-term structural imbalance between income and expenses ”.
“These projections are not exaggerated,” she said. “We expect something similar in the future.”
Wachtel said the widening of the deficit is in part the result of increased operating expenses, including restructuring and the addition of positions, since fiscal 2014. Four of those positions, in particular, are related to public safety, she said.
“They come with public security pensions that need to be funded,” Wachtel explained.
With what she calls a “real risk” of more deferred state income, the projected growth in pensions (estimated at 40% over the next five years) relative to stable or declining income is causing real pain. head to the village.
“It’s definitely not sustainable,” Wachtel said. “The more you invest in pensions, the less you can invest in operations.”
Fiscal year 2020 marked the first full year of non-residential sales tax revenue for the village, which was projected in the village’s long-term analysis in 2018 to reduce the operational deficit to $ 143,000 – 160 $ 000 through fiscal year 2021. As reviewed at the Village’s last board meeting of 2020, revenues are higher than expected and expenses lower than forecast for this fiscal year due to changes made during the COVID-pandemic. 19. This means Flossmoor now expects to have an operating surplus of $ 186,665 by year end.
“Fiscal 2021 has really bought us a year,” Wachtel said. “It’s the good one news. “
But Wachtel called this non-residential sales tax a “stopgap,” albeit successful. She said if the village continues to fully fund the programs, it will look at a deficit by fiscal year 2022 and worse beyond.
“We expected to be in a distress situation by Exercise 23,” she said. “What we mean is that we will be below our reserve policy and depend on a fund balance below our reserve policy to support operations.”
The five-year projection calls for an accelerated use of the Flossmoor fund balance to support operating expenses, potentially leaving the village below its reserve policy by the end of fiscal 2023.
What to do to resolve these financial difficulties is going to be a challenge that will have to be taken up in the short term by the new board that will take office in May, said Wachtel.
But she added that there were still only a few additional sources of income on the table. One of these would be the passage of a water utility tax that could bring in about $ 143,000 a year, but which would be unpopular, she said. The second would be a tax on places to eat, which would bring in about $ 117,000 at 1%. His report notes that the village could also update various fees or adopt an amusement tax. But none would reach the level of the rule of non-domestic assistance provided.
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