Palatine paints more optimistic financial pictures

When it comes to economic health, the village of Palatine is finally treading water.

That’s the description used Monday by Village Manager Reid Ottesen, who said Palatine seems to be in a better place after swimming upstream the past couple years in the wake of the recession.

“Things appear to have stabilized,” he said.

In a mid-year financial review covering the first six months of the year, Ottesen said revenue exceeded expenses by $8.4 million, resulting in a healthy surplus.

Revenue from property taxes, sales tax and the state income tax all were outpacing the budgeted amounts, though the encouraging numbers were somewhat tempered. For instance, property tax revenue was up because the county was so late delivering its payments that some carried over into the current year.

Officials attributed the lower-than-expected expenses to a hiring freeze now in its third year, as well as the public works and police union contracts paying out more in the second half of the year.

On the down side, building-related permits were lagging because construction projects haven’t rebounded the way the village thought. Also, there aren’t as many police officers on patrol, resulting in fewer discretionary tickets for offenses like speeding and parking overnight.

One major cause for concern is the telecommunications tax revenue, which came in $350,000 under budget through June. That fund is the primary source for capital projects and equipment in the village, and Ottesen said officials may need to rethink its funding model if residents continue to get rid of their landlines.

“It is a concern to us,” Ottesen said.

Ottesen reemphasized the need for pension reform, saying it’s an unsustainable system that will increasingly hurt the village as Palatine’s obligation continues to grow each year. He recommended officials continue to pressure Springfield legislators.