Buffalo Grove in good financial shape despite budget challenges

Buffalo Grove has reached the midpoint of its fiscal year in decent shape, considering the gloomy financial climate facing the suburbs.

In his midyear report to the village board this week, Finance Director Scott Anderson said the village's budget projected $60.8 million in expenses, offset by $60.1 million in revenues.

One bit of positive news Anderson shared was that Moody's bond rating service kept the village at a AA1 rating after a recent review of the village's financial situation over the past several years, a stutter-step away from AAA. It had even contemplated moving Buffalo Grove to AAA, a move that "in this environment is unheard of," he said.

What is delaying that upgrade, though, is the revenue situation.

Income tax revenue the village gets from the state is down 14 percent thus far, while sales tax has dropped about 15 percent.

"Fortunately, these trends were noted early in the budget year," Anderson said, adding that the village has imposed a hiring freeze, looked to downsize where appropriate, put the brakes on funding capital expenditures and reserve funds, and tried to extend the life of service vehicles. At the same time, he stressed that the village is making sure it does not jeopardize services to residents.

Because motor fuel tax receipts are the primary funding source for the village's street maintenance program, Trustee Steven Trilling urged Buffalo Grove residents to buy their gasoline in the village. The money that the village collects in motor fuel tax is based on a per gallon charge, he pointed out.

"So if you're buying gasoline here within the village, you're contributing directly to the village's coffers, which then can improve our roads," he said, suggesting that residents fill up before leaving town.

The weather also has had an impact on the budget. Way down is revenue from water sales, since people have been doing less irrigation and lawn maintenance. In fact, Anderson said usage in the most recent billing period was the lowest in 18 years.

Weather has also contributed to a decline in golf revenues, mainly at the Buffalo Grove Golf Club, which has had 20 days of no play because of wet conditions. Rounds there are down 13 percent.

"Forecasts are a problem too," Anderson said. "Even though the forecast says there is a 30 percent chance of rain, there is a 70 percent chance it will be nice. But just hearing a forecast with potential rain has been driving customers away from the golf course."

Village Manager William Brimm noted that management at the golf courses has been conscientious about paring the resulting operating deficit and finished July at nearly the break-even mark.

Trustee Jeffrey Berman added that the village was prudent in accumulating a reserve fund.

"It allows us the luxury, I believe, of weathering the storm that is taking place in the economy with far less impact to services, to employees, to the community at large than a lot of our neighbors," he said.