May 31st, 2016 2:02 PM
By Bob Uphues
On the heels of a fiscal year in which every single fund, from general operation to water to waste hauling ended in the black, North Riverside's finance director on May 24 said the village is in its best financial position since prior to the economic crash of 2008.
Although the figures are not yet audited, revenues for the second straight fiscal year reportedly outpaced expenditures in the village's general operating fund, which pays for day-to-day expenses such as salaries and benefits, including pension contributions, by nearly $200,000.
And for the second straight year, North Riverside's water enterprise fund, which for two decades operated at a loss because the village's general fund subsidized costs it now passes along to customers, also ended in the black by about $430,000.
"2016's financial statements are the healthiest they've been for the village in the last eight years," Finance Director Sue Scarpiniti told members of the village board, who were gathered at a finance committee meeting to discuss the proposed budget for the 2016-17 fiscal year, which began May 1.
During the second of two meetings to discuss the proposed 2016-17 fiscal year budget, Scarpiniti on May 24 also said the village will be in a stronger position to argue its case for an improved bond rating when village officials meet with the Moody's rating service later this month.
"I'm very optimistic that I am going to make a very good argument to Moody's that the village's bond rating should be readjusted," Scarpiniti said. "I'm confident Moody's will consider at least removing the negative outlook at least. But I'm hoping for a more aggressive bond rating."
In 2015, Moody's reaffirmed the village's Baa1 bond rating, which included a negative outlook, but the firm did say the village could improve its outlook by continuing to balance its budget and address pension concerns. The village was able to do both those things in 2015-16.
Bond issue in the offing?
Should the village's bond rating improve, officials would be poised in the next six to eight months to issue between $2.2 million and $2.5 million in alternate revenue bonds to fund a major street improvement campaign along with a handful of other capital expenditures identified in the 2016-17 budget.
Those other expenditures could include new financial management and recreation management computer software packages, which will total roughly $175,000, and a cooling system for the police department, which is estimated to cost $105,000.
In the fall of 2015, the village board gave the OK to explore funding options for a $2.2 million plan to resurface four miles of residential streets in North Riverside. At the time, Mayor Hubert Hermanek Jr. called the condition of the residential streets "the number one complaint this village has."
The debt service on the alternate revenue bonds would be funded by earmarking roughly $250,000 in revenue the village receives from its places of eating and drinking tax. The village will raise that tax to a full 2 percent from the present 1 percent in 2016-17, which should result in an additional $460,000 annually.
North Riverside also plans to spend $50,000 to have its engineering firm conduct a water system flow analysis in order to produce a long-term plan for water main replacement, especially in areas where streets are being resurfaced.
The village in the past had been unable to address large-scale water system improvements because the fund ran a consistent deficit due to subsidies.
Another major purchase coming in 2016-17 is a new aerial ladder truck for the fire department. The truck, which is being financed via an installment contract with the manufacturer, Pierce Manufacturing, will cost the village $1.16 million.
It replaces a 1997 Pierce aerial ladder truck that has been out of service with an inoperable main ladder since 2014. The fire department will take delivery of the new truck sometime in July, according to Fire Chief Brian Basek, and will attempt to find a buyer for its old aerial truck.
Truce with firefighters?
The numbers in the 2016-17 budget also indicate that the village's two-year campaign to privatize its fire department may be coming to an end.
While the village is still pinning its hopes on a reversal of a circuit court decision by the Illinois Appellate Court and favorable responses to village protests of a proposed unfair labor practice ruling by the Illinois Labor Relations Board, the budget indicates North Riverside's investment in those fights is over.
The budget includes no money allocated for privatization in the new fiscal year and a much lower budget figure for fighting union grievances, most of which have come from firefighters in the past three years.
After spending $47,721 in legal fees regarding fire department issues in 2013-14, North Riverside spent $265,762 in 2014-15 and an estimated $252,475 in 2015-16.
The legal services budget for the fire department in the fiscal year ending April 30, 2017 is estimated at $100,000, a majority of that for contract negotiations and grievance proceedings.
The mayor and firefighters have been meeting informally for several months. On May 24, Hermanek said he'd agree to a contract with the union and hire three more firefighters if the union would agree to reduce the number of firefighters allowed to call off during a single shift.
Right now, two people are allowed to call off during a shift, a policy that Hermanek said is responsible for skyrocketing overtime costs that have prevented the village from hiring more employees.
Hermanek said the overtime problem would be solved if the union would reduce the number of people asking for a shift off from two to one. However, the union won't budge, Hermanek said.
Other notable expenditures in the 2016-17 budget include the creation of a $36,000 athletic coordinator position for the Recreation Department, a job Recreation Director Teresa Michalik says will pay for itself in increased program participation revenue.
Michalik has also asked for $30,000 to expand the department's work/storage areas by reclaiming a locker room.
The village board is expected to finalize its budget in June and pass an appropriations ordinance reflecting the budget numbers by the end of July.
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General operating revenues exceeded budget projections for fiscal year 2015-16 in North Riverside, helped along by stronger-than-expected sales tax figures, which helped offset an unexpected decline in revenues from fines, particularly from red-light camera violations.
North Riverside collected nearly $9.8 million in sales tax revenues in 2015-16, a 7.2-percent increase over the prior year and an almost 22-percent jump over the amount collected in 2013-14.
A similar jump was seen in the village's places for eating and drinking tax, which rose 9.6 percent in 2015-16 over the previous year and which was a 27-percent increase over the amount collected in 2013-14.
Despite the annual increases in the past two years, North Riverside is taking a conservative approach to estimating sales taxes for fiscal year 2016-17, which started May 1.
Village officials are predicting North Riverside will collect $9,975,000 in sales taxes during the present fiscal year, which represents an increase of about 2 percent.
However, the village board agreed at a meeting of its finance committee on May 24 to double the places for eating and drinking tax, which will bring in an additional $460,000 and to set its amusement tax at 5 percent.
The amusement tax affects ticket sales at the Classic Cinemas movie theater in the North Riverside Park Mall and the increase is expected to bring an additional $40,000. The only board member not in favor of either the amusement tax increase or places of eating tax increase was Trustee H. Bob Demopoulos.
The village board has agreed unanimously to double liquor license fees for video gambling parlors, such as Betty's, Anna's and Spins. The village is in line to get a fourth such establishment in 2016.
The license for gambling parlors to sell beer and wine will jump from $5,000 to $10,000 annually. A full liquor license will run a gaming establishment $12,000 instead of the present $6,000 fee. Those changes would become effective Jan. 1, 2017 and are expected to bring in an additional $20,000 annually.
Those additional revenues will help offset weaker than anticipated revenues in 2015-16 from red-light camera fines. That revenue stream, which has allowed the village to fully fund its fire and police pension obligations, saw a 16.4-percent dip year-over-year.
In 2015-16, the village is expected to collect $1.5 million in red-light fines compared to the $1.76 collected in 2014-15.
That decrease came despite the installation of a third camera at the intersection of 17th Avenue and Cermak Road. The 2014-15 numbers were based on revenue generated by only the two cameras at Harlem and Cermak.
Officials chalked up the decrease to motorists being more aware of the cameras.
While general operating revenues came in above budget projections, general operating expenditures came in under budget, according to preliminary numbers. The village budgeted to spend $16.68 million on general operations, but spent just $16.65 million, resulting in a general operating surplus for the fiscal year of $193,577.
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