While Gov. Bruce Rauner’s proposed state budget would slash $470,000 in funds for Flossmoor this year, the Meijer development will definitely mean a permanent increase in village revenues starting in 2016.
Village officials preparing Flossmoor’s annual budget see a promising fiscal future taking shape this year with the construction of a 192,940-square-foot Meijer store at the village’s southwest corner.
They also see the state’s continuing financial instability both as a major question mark and as an imminent threat to local financial resources. Earlier this month, Illinois Governor Bruce Rauner announced a plan to reduce the state’s sharing of income tax revenues with municipalities by 50 percent. If that happens, Flossmoor would lose about $470,000.
“It’s very early with a new governor and the state’s budget process, but that loss of revenue would be devastating for municipalities,” said Village Manager Bridget Wachtel. “The village would be forced to re-examine expenditures and revenue.”
Village revenues remain relatively flat and it is likely that Flossmoor will begin the new fiscal year with a deficit of about $450,000. But, as the 2015 construction season nears, the Meijer’s complex, to be built at Vollmer Road and Crawford Avenue, is already seen as a boon to the municipal budget for years to come.
Contractors for Meijer last year prepared the store site, and the village vacated 198th Street and demolished former residential properties. Construction of Meier buildings will start this spring, with an opening of the store expected in the spring of 2016.
“In addition to the quality-of-life amenities that this type of development will bring to our community, it will also impact the village with significant property and sales tax revenue,” Village Manager Bridget Wachtel said in the budget package that was submitted to Flossmoor Village Board members last week.
The overall budget for the 2016 fiscal year is expected to total about $20 million, Wachtel said. The village is likely to use about $450,000 in general fund reserves to cover operations in the upcoming year. “That is not far off the five year projection analysis completed last fall that anticipated the use of about $300,000 in FY 16,” she said.
Wachtel said Flossmoor has about $3.4 million in unrestricted general fund balances allocated for capital projects. When budget deficits take place, those funds are reallocated to cover operations.
Still, Wachtel said, Flossmoor remains financially stable despite the continuing ill effects of the economic downturn that began in 2007. Flossmoor has experienced stagnation in revenues tied to the regional and national economy – home prices are lower, and that impacts property taxes — but has not had to resort to harsh changes in services to village residents, she said.
The $8.5 million general fund, which covers the bulk of municipal services, is projected to end the current fiscal year with a surplus of about $63,000 in its operating budget, she said. The FY 2015 general fund budget, when approved last year, anticipated a deficit of $229,525. Wachtel called the projected year-end totals in the general fund “outstanding.”
Another indication of Flossmoor’s strong fiscal health, she said, is the village’s continued stellar AA+ bond rating, reaffirmed by Standard & Poor’s last year. That rating was instrumental in a positive bond sale for the next phase of the village’s eight-year water main replacement project.
Budget discussions are planned at the next two village board meetings, with personnel and additional funding requests in the spotlight on March 16 and water rates and fees, and finances and facilities, on the table April 2.
Board members are expected to approve the new budget on April 20 for a fiscal year that starts May 1 and ends April 30, 2016.
The current budget projections do not include this year’s 15 percent water rate increase from the City of Chicago that went into effect in January. The board will need to approve new water rates for residents and determine how increased costs of Lake Michigan water will impact the new budget and, perhaps, village services.