Stub Year 2020 Budget: Different Name, Same Great Services (Part 1)

Stub Year 2020 Budget: Different Name, Same Great Services (Part 1)

By Village Manager Phil Kiraly

At their meeting on January 16, the Village Board adopted a new budget for Stub Year 2020, which covers an abbreviatedPhil_Kiraly fiscal year that begins March 1 and ends December 31, 2020. For the first, and only time, in the Village’s history, this budget marks a transition from a February 28 fiscal year end to a December 31 calendar year end. Therefore, this “stub year” budget is 10 months in duration and will be followed by a calendar year fiscal year beginning January 1, 2021 and ending December 31, 2021. Although the Village’s next fiscal year is different than in prior years, its impact on you won’t change: the Village’s team—consisting of our elected officials, myself and our excellent staff—work hard to develop and execute programs and projects that are in the best interest of our community. So, what does the budget mean to you? It is our plan for how to serve you in the most responsive, efficient and strategic way possible in the coming 10 months.

In today’s blog, I wanted to start by explaining the process we use to build the budget and give you some high-level facts about the newly-approved revenue and expenditure plan. Next week, I’ll dive deeper for you and explain some of those revenues (spoiler: some are new), what we are using them for and explain some of the exciting investments we are making in the community in the coming year (another spoiler: these projects are important).

Let’s start with a quick overview about how we built the new Stub Year 2020 budget. In short, it’s a process built on analysis, feedback, projections and vision. As I explained in my recent blog Breaking Down the Budget Process, the Village’s budget development process is perhaps the most important policy construction exercise that we go through each year. Guided by our Strategic Plan and Strategic Vision Statement, we have woven our strategic priorities (financial sustainability, infrastructure replacement, community engagement, commercial vitality, operational effectiveness, organizational development and environmental sustainability) into every aspect of budget development. Our team has developed a strong forecasting tool that helps us to anticipate our future revenue growth, which is slowing, and the need for future expenditures, which are growing faster than revenues. We use this information to consider what to change, thoughtfully reconsider our service delivery models (remember our garbage collection analysis?) and analyze possible new revenues within our limited toolkit. We consider various State mandates such as required pension contributions (which this year alone grew by over 19%), outside economic pressures and prioritize investments in our organization and our community. We seek to reduce the cost of Village government to you and operate within appropriate means to maintain the services and programs that you told us you love in the Village’s recent community survey. With all of this in mind, our elected officials and staff worked through proposed plans, possible programmatic changes, new revenue proposals and a spending plan that meets the community’s needs. Through months of dedication and hours of public discussion emerged the Stub Year 2020 budget, a document that comprises over 300 pages of the forecasts, expenditure and revenue summaries, department narratives and project descriptions that explain the Village’s financial position and spending plans for the coming fiscal year I reference above in great detail.

With all this in mind, here are a few specifics for the coming fiscal year:

  • The budget includes $30,768,102 in expenditures and anticipates $32,921,026 in revenues. Due to the abbreviated budget year, operating expenditures are slightly understated in some areas (reflecting only 10 months), and most revenues and capital expenditures reflect a full year (based on seasonality of when revenues are received, and capital projects occur). The excess revenue has been earmarked for the first two months of the coming calendar year fiscal year in 2021, as well as for future infrastructure projects in the Village’s water distribution system.  
  • Accounting for the changes in the transition to a stub year budget, operating budgets are within 1% when comparing Fiscal Year 2020 to Stub Year 2020, while General Fund investment in infrastructure and capital investments is growing.
  • Stub Year 2020 will be a big year for infrastructure investments. This budget devotes $7.5 million to various projects, such as Tudor Court street and streetscape improvements, new efficiency-focused water meters in every home and other critical equipment replacements. Tune in to my next blog for a lot more information on community investments.
  • There are some increased costs to you: water rates are increasing by 8%, sewer rates by 10%. We are imposing a new $0.03/gallon motor fuel tax and a new 1% places for eating tax. I’ll dive deeper into these next week, but know that the vast majority of these are not going toward day-to-day Village operating costs; rather, they are being set aside for those critical infrastructure improvements I mentioned above.

In this blog, I’ve scratched just the surface of the Stub Year 2020 budget, and I hope piqued your interest for next week’s blog. Between now and then, I encourage you to review the budget document in its entirety. Download the budget PDF here. If this is your first time looking through a municipal budget document, I encourage you to start with the Budget Guide on page 11, as it explains each section of the rather complex document.

Tune in next week for Stub Year 2020 Budget: Different Name, Same Great Services (PART 2)!