Libertyville facing cash crisis; fee hikes in the offing
A big annual debt for the Libertyville Sports Complex, falling sales tax revenue and other factors may wash away the village's rainy day cash reserves by early next year.
And with the options for cuts nearly exhausted, residents may be asked to close a projected $1.2 million shortfall with new fees for natural gas and electricity usage. The village also could nearly double the fee charged on cell phones and land lines.
Those recommendations will be considered Tuesday by the village board.
The situation is so dire and the move considered so aggressive that a public information campaign to explain it is planned.
"We've done everything we can with what we have, but at this time it's not enough" said Trustee Richard Moras, chairman of the village board's finance committee, which has been considering the options.
Though department heads will be asked to scratch for more savings, village staff said $2.5 million in cuts over the years has gone to the bone.
Eight positions have not been filled and a hiring freeze is in place. Capital purchases have been eliminated. Building maintenance has been deferred, and other fees, such as vehicle stickers have been increased.
"We've been cutting so much for so long the amount available we can cut without drastically reducing our services - there's not a whole lot there," said Finance Director Pat Wesolowski.
Imposing taxes on natural gas and electricity use, and nearly doubling the phone fee would generate $2 million or more in new revenue, Wesolowski said.
The electricity fee could cost a typical residential customer about $5 per month, for example, but exact figures of the total cost of the hikes to residents is being determined.
"The other things we could go find to cut will not cover the gap we're faced with now," Moras said Tuesday during a discussion of the situation. The committee voted 3-0 on a recommendation to proceed.
Sales taxes, which for decades have been driven by car dealerships in town, have dropped 22 percent or nearly $1.8 million from 2001 to 2008.
But the dip has accelerated. Wesolowski estimated by the end of the fiscal year May 1, the village will have received $750,000 less than budgeted.
Car sales at the village's 13 dealerships this summer should spike because of the Cash for Clunkers program, but are expected to plummet in the fall because inventories will be depleted, according to Mayor Terry Weppler.
The village also is obligated to pay $1.8 million per year for bond debt on the Libertyville Sports Complex. Two of the three components of the complex are for sale, but there have been no recent offers.
A delay in installation of red light cameras, which were expected to generate $473,000, and an expected bump of up to $600,000 in required employee pension payments are other factors village officials said can't be overcome without new revenues.
Strong car sales traditionally shielded the village from imposing utility taxes, as other towns have done, and has kept the local tax rate lower than most other communities, the finance committee was told.
"We've been able to save and economize over the years without it becoming apparent to the average citizen," Moras said. "There's no slack left."