Jul
07
Long range budget planning
Council met tonight for round three of long range budget planning. Most of the discussion was more of a quiz session of council so staff could try and ascertain what areas they might work on to trim the imbalance, and try and keep things on a steady keel.
To kick it off Village Manager Dave Fieldman ran through some quick numbers…
All the cutting and scrimping and leaving staff positions unfilled for this year, was just that: for this year. After all that, next year there’s a projected $4 million budget gap, growing to $6.5 million in 2013 if no changes are made. There’s three ways to address the gap:
a) cut services
b) increase revenues
C) both of the above
The general assumption of staff is that c) will be the correct answer. There were two exersizes staff provided council with. The first was called the Long Range Financial Planning Village Services Exersize (LRFPVSE…they may want to work on the names of this stuff so it makes a better acronym). In it, roughy 80+ things were given a 1-5 rank, 1 being lowest and 5 being highest priority to the village. Unsurprisingly, things like Capital Improvements: Stormwater (New), Police Response, Police Patrol, Emergency Fire Response, Snow Removal, Emergency Medical Response, and several others ranked highest. No brainer basic muni services.
Lowest ranking items were things like Domestic Animal Control, (Wild Animal Control ranked a bit higher), Leaf Collection, Historic Preservation, Holiday Recognition Program, Ice Sculpture Festival, Commuter Shuttle (pretty sure on this I’ll double check), and the Taxi Subsidy Program for seniors were among the lowest ranked. The largest group was the middle, including things like the 4th of July Parade, Sidewalk Maintenance, Tree planting, New Sidewalks, Crossing Guard Program, Green Operations, and Downtown Beautification.
Village staff identified seven possible strategies to deal with budget planning;
- Implement operating efficiencies
- Enhance revenue base
- Reduce/eliminate village services
- Reduce/eliminate village funding programs
- Reduce/eliminate village events
- Increase/enhance property tax revenues
- Increase/enhance other revenue sources
The second quiz was the Solutions and Strategies Prioritization Exercise General Fund Structural Gap (SASPEGFSG…really, guys, the acronyms are just not there). The categories matched up with the above for the most part, but here the exercise was to assign a portion of 20 “chips” to each strategy. Staff then tallied everything and did a fast and dirty Mean/ Median/Minimum Chips Assigned/Maximum Chips Assigned data breakout. There’s plenty of ways to misinterpret the raw data, so here’s my spin on the numbers.
Increase the Tax Base via Economic Development. This includes growing EAV, sales tax base, utility taxes through annexation and economic development. Kind of a no-brainer. Score 1.00/1/1/1. Out of a possible 0-1 chips, it scored a 100%. Greg Bedalov and Linda Kunze were sitting behind me smiling; if you’ve been reading DGreport you know they’re doing their part. Weighted (1 of 61 chips gives it a 0.82% weight) knocks it way down.
Improve Operating Efficiencies. Provide existing services at or near current levels but at reduced costs. this could include reducing staffing levels. Score 1.71/2/0/2. Out of a possible 0-2 chips, it scored 85.5%, or 2.8% weighted
Reduce or Eliminate Existing Services. This includes reducing staff levels. Score 4.29/5/2/6. Out of a possible 0-20 chips (pre-prepped as a big category), it scored 21.45% or 7.03% weighted.
Reduce or Eliminate Existing Funding Programs. Score 1.57/2/0/2. Out of a possible 0-2 chips it scored 78.5% or 2.57% weighted.
Reduce or Eliminate Village Community Events. Score 2.85/3/1/4. Out of a possible 0-4 chips, it scored 71.25%, or 4.67% weighted.
Increase/the Property Tax Levy. Score 3.57/4/0/6. Out of a possible 0-20 chips, it scored 17.85% or 5.85% weighted
Increase/Enhance Other Revenue Sources. this includes increasing existing revenue sources and introducing new revenue sources. Score 5.00/4/2/9. Out of a possible 0-12 chips it scored 41.66% or 8.33% weighted.
In order, here’s a possible to-do list based on the highly unscientific above:
- Increase/Enhance Other Revenue Sources.
- Reduce or Eliminate Existing Services.
- Increase/the Property Tax Levy.
- Reduce or Eliminate Village Community Events.
- Improve Operating Efficiencies.
- Reduce or Eliminate Existing Funding Programs.
- Increase the Tax Base via Economic Development.
My percentage assignments are just that, a simple percentage of score, then a percentage of the mean of chips cast for each category. If it has any basis (which it may not), staff will look to reduce or eliminate existing services, then look to enhance “other” revenue sources (many munis have already cranked up developer fees while it’s really slow). It’s also possible the village portion of property taxes will go up, and some community events get trimmed. But it does kind of reflect the sentiment of council that they are going to look for cuts to ease any possible tax/fee increases.
The Powerpoint presentation from the 7/7 meeting is here.
The Long Range Financial Planning Village Services Exercise worksheet is here.
The Solutions and Strategies Prioritization Exercise General Fund Structural Gap worksheet is here.
The Village should roll their long range financial planning exercise into TCD3. There are strong and potentially beneficial relationships between the two:
1) Last night’s financial planning and prioritization exercise is nearly identical to the TCD3 process of issues identification and prioritization. Treating Council’s input as their contribution to TCD3 – alongside the input from residents as a whole, the neighborhood sessions, the commission and board session, etc. – unifies and simplifies both processes by allowing them to be treated as one. The results from Staff’s doing the same exercise earlier should also be considered a TCD3 input.
2) Characterizing the exercise as “long range financial planning” and as “strategies prioritization” directed to defining a “new business model” all point to the same time horizon that TCD3 is intended to address, even though the exercise has obvious near-term (budgetary) implications as well. Defining a “new business model” implies policy and philosophical concepts of who we are as a community – not just what we execute in the short term to navigate the current economic situation.
One of TCD3’s opening statements says its objective is to “sustain a healthy and open dialogue about issues (both long-term and short-term) facing the Downers Grove community.” Integrating the Financial Planning Session with TCD3 a) puts both discussions in an arena where issues and concerns raised by all stakeholders can be considered together, and b) leverages the consulting expertise we’ve already contracted for TCD3.
Rather than have these two time-and-money-intensive processes running on separate tracks, let’s integrate them.
(I recommended this approach at last night’s meeting and followed up with an email to senior Village staff and Council this morning)
The attax (sic) on individuals and businesses by all levels of govt, federal, state and local is reaching the breaking point. The Village did a good job in modifying spending as it identified the developing $$ gap last year. This is evidence it will need to do much more in that regard. Looking far into the future we need to gauge what mix of businesses and types of housing stock present a financially sustainable and viable model not requiring a water torture series of tax increases to keep it going.
Bigger houses = more tax revenue
Seems simple.
The village put together a very informative and easy to read power point presentation. I think everyone should take the time to read it on the village website! This way you are aware of the strategies that the council and staff are debating on implementing to keep the village running efficiently and effectively.
Question: What the biggest expenditure is in the Downers Grove budget?
A. Operating costs
B. Village Council and Mayor salaries
C. Employee pay and benefits
D. Storm water projects
You’re right, Chad, the Village is putting all the information within easy reach for residents.
Besides the THREE presentations so far, there are also audio recordings of the three sessions so far. If you subscribed to the Village Council podcasts, they downloaded the day after each of the three sessions. Otherwise you can find them here ->
http://www.downers.us/podcast
Worth listening!
We could think about a $4 million shortfall in per-household terms. Divided by roughly 20,000 households, that’s $200 each per year, just for perspective. I’m not suggesting the best solution is for all of us to write $200 checks and end the discussion here, but if you ask people if they would rather see taxes increased or services and programs cut, a rational person is going to ask “increased by how much?” vs. cutting what, exactly. If you ask people if they would rather cut Heritage Festival, the ice carving contest, the commuter buses and community grants vs. paying $20 more tax per year (just a wild guess), a lot of folks would probably vote for paying the tax. The extras that set DG apart may not be priority 1 core services, but they also don’t add up to a lot of dollars per taxpayer. Informed choices must rule the day.
I think we need to ask what service’s are being duplicated by the state, country or township. Maybe Downers can stop providing those services altogether? There might be savings there.
Also, with all the taxes that are headed our way from our federal government the extra tax on Downers Grove residents may break some families. Think about it. Our President is talking about spending over a TRILLION dollars per year for a public health program, he wants to tax any company that emits carbon emissions (auto gas, home gas, electric etc…) and wants to institute a VAT tax which would add around 20% to everything we purchase. I think the village is taking the correct course of action for now. We need to wait and see what our wonderful federal government is going to sock us with before we sock it to DG residents. Not to mention the President says a second stimulus package is not out of the question.
Local governments wastefully duplicate many activities. Much could be saved by consolidating the overlapping local governments. Why do we need multiple school districts? Why do we need a separate park district? Each one’s got its own administrative overhead, its own fleet of vehicles, etc., etc. Recently the Village of Downers Grove spent money on a telephone robocall service, even though the schools already had one. Cut out the duplication and waste!
John,
You must be one of those blue dog Dems! I am starting to enjoy reading your posts again!
I don’t want to pay more Taxes, America has NO MONEY!!