Chris Lauzen promised to keep Kane County's property tax levy flat during his first term as chairman. On Tuesday, he and his staff presented a plan to both accomplish that goal and extend its life out to 2018.
The plan lays out a general financial course of action for five years, including the current fiscal year. It uses both historical data and financial assumptions about the future to show the potential pitfalls of keeping the property tax levy flat.
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The main hurdle, besides keeping all non-payroll expenses flat, will be a deficit that manifests at $176,000 in 2017. That problem grows to nearly $1 million in 2018. A combination of staff raises ranging between 2 percent and 2.5 percent in each fiscal year and the upcoming schedule of bond debt payments will trigger the deficits.
There are two ways to avoid those deficits, Onzick told county board members. Either cut all non-payroll expenditures by 0.90 percent each year of the plan. Or, find $250,000 of new revenue each year. The plan did not provide any ideas for where to cut or where to find the new money.
However, it did provide a backup plan in case board members don't have any answers either. Onzick proposed the creation of a new "Property Tax Freeze Protection Fund." The idea is to accumulate about $1 million in a fund that is untouchable unless the projected deficits occur.
The most recent audited returns from 2013 showed the county finished the fiscal year with a $9.7 million surplus. The plan takes $1 million of that surplus to create the new tax freeze fund. It takes another $2 million to create an additional emergency reserve fund over and above the tax freeze fund.
The emergency reserve would be in addition to whatever contingency amount the county board builds into each fiscal year's budget, creating three levels of protection for the tax freeze. The emergency reserve could only be tapped in the event of a severe loss of income or a major unplanned expense.
The majority of the rest of the surplus would go toward capital projects and shoring up the county's health insurance fund to protect against any major unexpected rise in insurance claims.
Lauzen touted the plan as another move to increase transparency about the county's finances.
"The assumptions and planning thoughts are now being shared with all of you," Lauzen said. "This is not one or two peoples' budget. This is 515,000 peoples' budget that all of us are entrusted with."
Only about half the county board showed up to the meeting to review the plan Tuesday. It will receive some tinkering through the board's various committees before the full board signs off.
Board members present spoke in favor of the plan. They also hailed the creation of a new five-year capital projects plan that Lauzen and staff will unveil next month. Capital projects are expected to find funding only through whatever budget surpluses the county sees in the next five years.