Local News

Homewood approves reduced budget amid shutdown

Homewood officials cut more than $800,000 in expenses to help make up for more than $1 million in projected revenue lost in the 2020-21 budget approved by the Homewood village board Tuesday.

“We’ve been through recessions before, in 2001 after the 9/11 attacks and in 2008 with the housing meltdown and now, what looks even worse, with this whole COVID-19 thing,” Homewood Finance Director Dennis Bubenik said. “We do have, on-hand, options available. We didn’t go to the most-severe option but we would not do ourselves a favor if we didn’t have a list of every option out there.”

The most severe option, Bubenik said, was layoffs. None are included in the approved budget.

“I’m not guaranteeing that we’re not going to have to do something more severe, depending on how the next 12 months go,” he said. 

Only Mayor Richard Hofeld, Village Manager Jim Marino, Village Attorney Chris Cummings and Bubenik were physically present and all were at a safe social distance. The board joined via Zoom. 

Videos of the meeting and a public hearing on the budget are available on the village website.

A total budget of $32,513,589 and a capital budget of $5,957,533 were approved. Major adjustments were made resulting from the coronavirus shelter-in-place order. 

“Department heads stepped up to eliminate or defer programs and purchases to help cover the budget shortfall,” Marino said in a statement Wednesday. “We always strive to maintain a healthy fund balance by being judicious in what we spend and maximizing our revenue sources so that we have adequate cash to cover budget shortfalls during economic downturns. This effort is now paying off.”

Before the shutdown, Bubenik said the village was projecting a $348,180 surplus. Reductions had to be made in projections for sales, places for eating and income tax revenues. The board suspended the places for eating tax for March, April and May at the April 14 meeting in an effort to help local businesses. 

Revenue projections were cut by $1.35 million. That includes a $673,442 decrease in sales tax, $355,000 in income tax, $215,000 in places for eating tax and $108,000 in other revenues.  

Cuts totaling $827,000 were made. The remaining $229,516 will be made up by the fund balance created in previous budgets. That number was reduced from a previously-projected $292,329.

“It was a very challenging budget this year. We’ll see where we’re at next year. We’ll monitor it closely in these coming 12 months,” Bubenik said. “Right now, there are still some unknowns here. We really had to make some changes in our budget process.” 

After the 2008 recession, Homewood used its fund balance for four years.

“This may not be a one-year thing,” Bubenik said. “Revenues probably ain’t going to just bounce right back. It’s going to take some time for people to get back into what’s more normal.”

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