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Politics & Government

Draft Hinsdale Budget Fixes Streets, Raises Salaries, Maintains Staffing

Finance Commission praises the budget for its fiscal responsibility.

The proposed Hinsdale village budget, unveiled at Thursday night’s Finance Commission meeting, is being praised by commissioners for maintaining fiscal discipline while finding the money for major infrastructure needs. After 11 staff cuts and a wage freeze this year, the new budget proposes no staff cuts and raises salaries 3 percent.

Trustee Doug Geoga, chairman of the Village Board’s Administration and Community Affairs (ACA) Committee, presented a slide show highlighting key elements of the proposed $33.5 million budget.

Geoga said allocating funds for needed road and sewer improvements was a major priority in developing the draft budget.

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“The master infrastructure plan, which this commission examined and sent to the board last year, is, as you’ll recall, fairly front-end loaded,” Geoga noted. “Although it’s a 15-year plan, there are very substantial expenditures, particularly for the three years after the one that we are about to begin. So we’re trying to approach that capital project with a multi-year perspective.”

Last November, voters approved a sales tax increase to help fund the infrastructure investment plan. The increase is expected to generate approximately $1.5 million per year in additional revenue. However, meeting the estimated 15-year price tag of $86.8 million for infrastructure work requires an average annual expenditure of $5.8 million, meaning the village must also use other revenue sources if it is to stick to the plan.

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“This is a budget that is intended to create a surplus that can be contributed to infrastructure work of $1.1 million,” Geoga said. “It’s able to do that while being faithful to this commission’s stated policy objective of maintaining an ending fund balance for the corporate fund in excess of 25 percent.”

Village will need to borrow money for infrastructure work

Geoga said the 2011-2012 budget would include $7.75 million for infrastructure work. “The only way to do that much infrastructure work, even with a budget as tight as this, is to undertake some substantial borrowing,” Geoga acknowledged.

He said an estimated $4.65 million would come from low-cost, low-interest loans from other government programs, rather than from a bond issue.

“It is, nonetheless, borrowing that ultimately will need to be repaid,” he added.

Finance Commission Chairman Richard Burridge asked Geoga why the village wouldn’t consider long-term borrowing, given that interest rates are relatively low presently.

“We do consider long-term borrowing, and we may very well need to do so in future years,” Geoga responded, but he said officials wanted to avoid saddling taxpayers with major principal and interest loan payments in the future.

“So what we’re trying to do is be as faithful as we can to the schedule without tying the hands of future boards,” he said.

Merit pay increases to replace step raises

The village’s infrastructure crisis arrived at a bad time, with the recession causing declines in tax revenue and fund balances relatively low. Officials felt harsh corrective measures were unavoidable, so the budget for the current fiscal year included eliminating 11 staff positions and instituting a wage freeze for all non-union employees.

The draft budget for the upcoming fiscal year, which begins May 1, maintains current staffing levels and provides for salary growth of 3 percent. In the past, non-union employees received automatic “step” pay increases each year, but Geoga said the new budget reflects a shift to a merit review system for raises.

“It is thought that this will help us control costs in that the size of the merit pool is 3 percent of the relevant salaries, whereas the step function had been 5 percent,” Geoga explained.

Burridge asked if some employees might not get any salary increase under the new plan.

“That would be at the discretion of the manager,” Geoga said.

He added that, at the other end of the scale, some employees might see raises greater than 3 percent.

Commissioner Matthew Posthuma asked if any thought had been given to further staff reductions.

“I think the staff is about as lean as it can get,” Village President Tom Cauley said. “On the police side, if you look at comparable communities, the ratio of officers to residents in Hinsdale … there are more residents per officer than any surrounding community.”

Trying to cut fire department staffing also was problematic, Cauley added.

“When you think of firefighters, you’ve got to think in terms of shifts,” he said. “In order to reduce them, you’ve got to go down three people at a time. There’s no way to do that.”

Favorable reception

Commissioners praised Geoga, Cauley, and Finance Director Darrell Langlois for their work on the budget.

“This is a great budget,” said Jerry Hughes. “This is a great place to be in as a village, reflecting upon where we are today, versus even as short as 12 months ago.”

“I think it is a very well thought out budget,” agreed Stephanie Kushner. “It’s clear we’re spending cautiously.”

Commissioner Adam Waldo said the budget “strikes the right balance between making long-overdue investments … and driving towards a corporate fund reserve balance that exceeds 25 percent.”

The next step in the budget process will come March 15, when the Village Board reviews the draft. The board is expected to adopt a new budget at one of its two April meetings.

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