Layoffs, higher fees ahead in Prospect Heights

Layoffs, reduction in services and higher fees are on the horizon for Prospect Heights residents as city officials grapple with a nearly $500,000 projected deficit.

The city could potentially eliminate up to six employee positions in the 2009-2010 fiscal year.

"It's across all departments of the city," Mayor Pat Ludvigsen said. "I don't think there can be more (than six layoffs). We can't afford to lose anybody."

The city currently has 49 employees serving a population of 17,100 residents. The last round of layoffs was roughly 8 years ago. Cuts will most likely occur in police and public works, two of the city's largest departments.

"We've been laying off over the years already, even in good times," Ludvigsen said. "We're not cutting the fat. We're cutting to the bone now. This is deep reductions in essential staff."

Such measures are not wholly unexpected. The city has been struggling with its finances for some time and raising fees where it can.

How it got to this point is largely due to the way city operations are funded, Ludvigsen said.

Of the city's roughly $6 million annual operating budget, 60 percent goes toward police operations.

Prospect Heights collects about $240,000 yearly in property taxes and a little more than $1 million in sales tax, which is pittance compared to neighboring Wheeling's $5.1 million in property taxes and $10.1 million in sales tax revenue, he said.

Ludvigsen said the city doesn't get enough property tax or sales tax revenue to offset the increasing cost of providing services, and it has no savings to dip into.

"We have no reserves so when we have budget problems, we have to cut services, people, equipment, projects," he said.

No capital improvements, such as street repairs or replacing public works equipment, are planned next year. Officials are considering raising business license fees by 10 percent and increasing contractor registration fees from $25 to $100.

"These are not going to be significant money generators," Ludvigsen said. "But we depend on every dollar that comes in."

Prospect Heights already raised parking ticket fines last year, and recently established a new tax on food and beverage sales, and increased waste hauling fees.

Whether voters approve raising property taxes and establishing a new police protection tax on April 7 will determine the police department's staffing and if the office will remain open to the public during weekday hours. Even if the tax increase is approved, the city won't receive revenue from it until the fall of 2010.

"It's very grim, and the cuts we're making are in order to survive," Ludvigsen said.