Schaumburg plans to rely on its reserves

Despite a slow economy and unexpected expenses from last August's fierce storms and winter's relentless snowfalls, Schaumburg's reserve funds are more than adequate to make it through the year ahead.

But officials are already wary that further adjustments may be needed to their expenses to get through a long-term economic downturn.

Trustees Tuesday recommended approval of a 2008-09 budget that carried with it a nearly $3 million deficit in the general fund.

Still, while revenues for the year ahead are projected to rise only 0.6 percent, the increase in costs has been kept to only 0.3 percent.

Village Manager Ken Fritz praised the cooperation of his department heads for keeping the annual increase in expenses so low.

"This really shows, from my point of view, that we did the best we could in controlling expenses," Fritz said.

The village of Schaumburg collects no property taxes, but while it's been fortunate to build up $34.4 million in general fund reserves, its greater reliance on sales taxes makes it more sensitive to swings in the economy.

But village board members expressed their gratitude to staff for both long-term and recent adjustments in expenses to meet the challenge of flattening revenues.

"The budget this year is probably one of the toughest ones that staff has had to put together," Trustee Tom Dailly said. "But that doesn't change the fact that we're still $3 million in the hole."

While the proposed budget exhibits a certain amount of optimism that the current sluggishness of the economy is temporary, he urged a close watch on it to avoid serious trouble later.

"I think we need to have a serious discussion in the next six months about where we're going," Dailly said.

Mayor Al Larson agreed with Dailly, saying that while the village's "rainy day fund" is doing exactly what it was meant for, it's important to know as quickly as possible whether the year ahead really is just "a rainy day" or not.

Next Tuesday is when the village board will formally adopt the annual budget, which will be in effect from May 1 until April 30, 2009.