Homewood’s budget remains stable and healthy, although expenses are expected to increase a bit more than revenue in the coming year, according to village officials.
Finance Director Dennis Bubenik provided the Board of Trustees with an overview of the 2016-2017 budget on Tuesday, March 22.
Revenue is expected to increase 3 percent, he said. Property tax revenues continue to suffer from the effects of the 2008 recession. Sales tax revenue growth has been good and is expected to continue upward as a result of new commercial projects, especially the conversion of the former Kmart building into a Walmart Supercenter.
Bubenik noted that state revenue sharing remains an area of uncertainty, with Gov. Bruce Rauner’s interest in cutting funding for municipalities. The state has not taken any action, however, so village officials will continue monitoring the situation.
One area affected by the state’s budget problems was the Motor Fuel Tax revenue sharing, which was suspended for a time in 2015. The state has now caught up with payments, Bubenik said, but the village opted to forego street resurfacing projects until the 2017 or 2018 budget years.
Another question mark is the future of water rates. The village buys water from Harvey, which gets its water from Chicago. Chicago’s rates increased significantly each year for several years. The last increase was in 2015, but Chicago has not indicated whether another rate increase is pending.
The Menards’ expansion, which is expected to boost sales tax revenues in the future, will initially put a dent in revenues. Bubenik announced that the company has decided to close for nine months while the major expansion project is completed.
He said the closure would cost the village an estimated $150,000 in sales tax revenue, but with some Menards’ shoppers finding what they need in nearby Homewood stores, the net impact would be about $75,000.
Expenses are projected to increase 5 percent with the addition of projects identified by village departments that weren’t foreseen when the budget was being developed in 2015.
Increases include $115,000 for the business incentive program and the addition of two administrative positions: a director of marketing and a director of the Homewood Science Center. The village has committed to supporting the science center during its early development, but the non-profit organization being formed to operate the center is expected to be self-sustaining in about three years.
Bubenik said 89 percent of the marketing director’s salary will be offset by reductions in staff and in contractual relationships. The village has contracted for marketing services for several years.
The budget includes $150,000 for science center start-up costs, including the director’s salary and operating and materials costs. The village will use proceeds from the sale of a portion of 175th Street to Menards to cover science center expenses.
The budget includes a number of capital projects that will be paid for with general obligation bond funds, Bubenik said.
Capital projects include:
- Replacing cameras in the Village Hall board room, $6,000.
- Replacing the Public Works garage floor and drain system, $300,000.
- Addressing leaks in an underground fuel storage tank, $37,000.
- Replacing elments of the electrical system at pump station on 183rd Street, $16,000.
- Replacing the front entrance to the Police Department, $25,000.
- Adding security cameras to three water towers, $20,000.
- Replacing monitoring equipment and software for the water system, $131,000.
- Replacing floor surfaces at three lift stations, $30,000.
- Rebuilding one lift station, $12,000.
- Expand the Merchants Park parking lot, $32,000.
- Adding public parking signs at businesses that agree to allow after-hours public parking, $20,000.
- Police Department building remodeling, $42,500.
Homewood uses a two-year budget cycle, so the changes Bubenik presented are adjustments to the budget passed in 2015. The board is expected to vote on the budget adjustments at its April 12 meeting.