Cuts turn Hawthorn Woods' deficit into surplus

The Hawthorn Woods village board Monday night slashed expenses to balance and approve the village's fiscal year 2009 budget, transforming a projected deficit of $131,000 into a surplus of $78,000.

The cuts, which included eliminating hiring a new police officer in 2009, were made to keep expenses in line with revenues that have fallen far below expectations in the areas of police fines, interest income and state income taxes, officials said.

Officials reduced some of next year's general fund expenses by spending the money this year on items such as road salt and by moving a portion of the salary and expenses for a village employee and elected officials to other funds.

Village officials decided not to decrease funding the police pension fund or shortchange the village's special service area road program next year.

However, the surplus was a result of the board withholding allocation of $120,000 toward the road program, which is already underfunded.

Officials also added spending $40,000 for the salary of a replacement finance director, and they decided to put the remaining $78,000 surplus into general fund reserves.

Trustee Greg Gehrke said state-mandated police pension contributions are a drain on the village's general fund.

"We have been paying this out of general fund for a significant period of time," he said. "It's eating the budget alive. We've got to deal with this pension fund year in and year out. It keeps going up."

Gehrke supported decreasing police pension contributions by $10,000, but the measure was voted down.

However, the village board voted to try put a referendum question for a separate pension levy on the April 7 ballot. The filing deadline is Feb. 2.

Hawthorn Woods Mayor Keith Hunt called on trustees to recommend any additional cuts to balance the budget. No cuts were suggested.

Village Attorney Thomas Good said the village is not bound to approve a balanced budget, though it is generally preferred.

Since November 2007, the village has slashed expenses and laid off 14 employees to make up for revenue shortfalls caused by a slowdown in new home construction.

Those cuts helped the village turn around a roughly $722,000 deficit this fiscal year ending Dec. 31 to a projected surplus of roughly $100,000 in the general fund. Officials also anticipate a roughly $220,000 surplus in the community development fund.