Director says Mount Prospect is fiscally fit

Mount Prospect's finances have passed their six-month checkup.

This week, Finance Director David Erb gave village board members a mid-year review of the current budget, as well as a peek into next year.

Erb offered a comforting picture, projected an end-of-the-year surplus in the general operating fund of $387,442. The fund is used by the village to pay for general expenses like police and fire, with expenditures expected to range between $38 million and $39 million.

However, Erb warned that the village could still face a deficit in 2008 of $239,486. Still, he said, "I would expect that to be eliminated during the budget process."

He said the village can expect to see significant capital projects in the next year, including a new fire station, the expansion of the public works facility and an emergency operations center.

Funding is expected to come from a surplus in the general fund and an approximately $10 million bond issue, to be paid off over 20 years at $750,000 per year. The board can approve the bond issue without holding a referendum.

As for this year, Erb said that the general fund has not faced extraordinary expenditures in areas like flooding or snow removal, as it has in the past. Also, for the first time since 1998, there have been no transfers from the general fund.

In addition, he said the fund balance in the general fund exceeds 30 percent of expenditures -- the benchmark is 25 percent.

Erb said revenues lagged in only two areas, those from the real estate transfer tax and the tax on telecommunications.

He said the real estate transfer tax revenue had declined from $1.5 million in 2005 to an estimated $700,000 this year.

He attributed the decline in revenue from the telecommunications tax to customers embracing digital equipment not covered by the tax, such as cable and DSL service. "There is also a move by residential business customers to use Internet phone service."

On the other hand, Erb said ambulance transport fees are coming in higher than expected. In 2006, the first year the fees -- which are paid by the insurance companies -- were instituted, the village collected $783,000. This year, it expects $900,000. The difference, he said, is that last year there was a lag in receiving payments from Medicare and other insurers.