A Resident's Guide to the Village Budget
Annual Budget Development Overview
The budget is approved annually by the Village Board in compliance with the Village Charter and municipal code. The adopted budget serves as a forecast of revenues it will receive and expenditures it will incur during the year. Guided by the policies, priorities and goals of the Village Board (including the Village’s Strategic Plan, financial policies and source documents), the budget is the single most important policy document produced by the Village each year. The budget is both a spending plan for the Village's financial resources and the legal authority for Village departments to spend the resources for public purposes. Through these resources, services are provided to meet the needs of the community.
In conjunction with the budget, the Illinois Compiled Status (ILCS) requires the Village to adopt an appropriations ordinance, which sets forth the legal maximum spending limits for the Village for the fiscal year. The appropriation authority requested represents the budgeted amount plus 10%, which accounts for possible changes to planned expenditures that may take place in a given year. Revenues and expenditures are monitored through the year to determine whether actual performance is within the target allocations.
As depicted in the graphic below, work on the annual budget begins with staff’s review of capital and infrastructure needs, circulation and evaluation of a fee survey, development of a financial forecast and scheduling of a public hearing to consider the proposed tax levy ordinance for the coming year. Staff summarizes findings into reports, which are reviewed by the Finance Committee and considered in accordance with financial policies and other critical documents, as the Village’s annual spending plan is drafted. Such documents are included within the budget for reference. Feedback from each step, including the budget workshops to review the draft budget, is incorporated into the final budget document.
Stub Year 2020 Budget Overview
For many years, the Village's fiscal year has begun March 1 and ended February 28 (or 29 in leap years) of the following calendar year. As part of discussions formulating the Strategic Plan, it was suggested that transitioning to a fiscal year that corresponds with the calendar year would more clearly communicate the Village's finances to both the Village Board and the community. 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. 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).
Stub Year 2020 Budget highlights include:
- This budget, like all budgets presented to and approved by the Village Board, is in balance. Overall operating fund revenues exceed expenditures by 2.1 million, which will be reserved for future water distribution system projects.
- The Village has continued its efforts to limit growth in our operating expenses while working to focus expenditures toward investment in critical infrastructure. 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.
- This budget contributes actuarially-mandated payments to our pension funds. This includes the Police Pension Fund and Fire Pension Fund, as well as required contributions to the Illinois Municipal Retirement Fund which have grown by 19% from last year.
- This year, over $7.5 million in capital and infrastructure spending is planned (including $2.5 million for water meter system technology implementation, $600,000 for road improvements and $400,000 for a replacement of a sewer vac) and will be supported by various sources. This practice is in line with the Village’s Financial Policies and all spending plan recommendations maintain minimum fund balances.
- Staff developed a recommended financing plan for the 10-Year CIP to provide resources for over $53 million in needed infrastructure and capital investments through 2029 including bond financing (to include at least two referenda, as well as revenue-based bonds) along with the use of General Fund revenues, user fees, fund balance reserves and other resources.
- Water and sewer rates will increase by 8% and 10% respectively. This is the third year (of 10) of planned water rate increases recommended by a 2017 study which will provide necessary resources for investments in our water and sewer distribution systems (i.e. mains, meters, elevated storage).
- The budget includes the implementation of additional new revenue structures, including a 1% non-home rule Places for Eating Tax as well as a new State-authorized increase in the Motor Fuel Tax, both to help further diversify the Village’s revenue sources and to provide necessary resources for infrastructure investment and operations.
- The budget includes an increase in the property tax levy within the limitations imposed by the Property Tax Extension Limit Law (PTELL) of approximately 1.9%, or $244,115 from last year’s extended levy. This increase is projected to have a limited impact to Glencoe residents’ property tax bills – the average homeowner may see an increase of approximately $150. With the Village’s non-home rule status, foregoing these increases to our tax cap would strip taxing authority from the Village, which could put us at risk as we face current and future unfunded mandates from the State or other unexpected, anticipated costs.
Despite this coming stub year’s abbreviated duration, there are still major initiatives planned. These include:
- Construction of an enhanced roadway and streetscape for Tudor Court in the downtown, following a two-year public engagement process.
- Investment in the Village’s water metering system to replace all residential and commercial water meters in Glencoe with new state-of-the-art meters to increase operational efficiency and effectiveness and encourage more responsible use of water.
- Continued implementation of the Village’s new enterprise resource planning (ERP) system, representing the second in an at least three-year implementation cycle.
- Continued progress on goals, initiatives and tasks in the third year of the Village’s four-year Strategic Plan.