Lake Zurich has budget surplus and financial concerns

Lake Zurich projects another modest surplus for a new, eight-month budget starting May 1, but officials cautioned residents about the need to pay for infrastructure improvements and pensions.

Trustees voted 6-0 on Monday night in favor of the $36.7 million budget that'll run through Dec. 31. Lake Zurich then will enact another budget to match the calendar year beginning Jan. 1, 2017.

Village Manager Ray Keller said the move to a calendar year is a more logical approach for budgeting and is a move toward greater financial transparency. Similar to other governments, Lake Zurich has been operating with a fiscal year running from May 1 to April 30.

"It's better understood," Keller said after the meeting. "People don't quite understand (fiscal years). It's very confusing."

Officials said the new budget shows an expected operating surplus of $37,300. The village's 2015-16 budged had a projected surplus of $5,100.

An improving economy, more efficient village operations and a healthier revenue base were cited as reasons Lake Zurich's finances have stabilized.

However, officials noted some financial concerns remain including the funding of police and fire pensions and capital improvements.

Taxpayer contributions to the fire and police pensions are budgeted for $3.48 million from May 1 through Dec. 31, up from $600,000 in 2009, according to the village budget. Officials said the police pension is funded at 44 percent, while fire is at 56 percent.

Lake Zurich's budget notes "a lack of sustainable funding" for what would be deemed critical capital improvements, which include sewers, sidewalks and roads. The budget for the rest of 2016 sets aside $1.9 million for road resurfacing and maintenance, which is about $300,000 less than recommended in the village's annual program.

Trustee Jeffrey Halen said it's not easy to pay for capital improvements.

"Expenditures keep increasing," he said. "The price of asphalt keeps increasing. The price of sewer lines keep increasing, but we only have a finite revenue source through property taxes and sales taxes."