Elk Grove Village cuts spending, freezes hiring, salaries

Elk Grove Village is cutting spending for the 2010 fiscal year budget by $10 million from the previous year due to the economy, officials said during a Tuesday night budget hearing.

The proposed village budget for the fiscal year starting May 1 is $83.2 million.

Cutbacks include pay freezes, eliminating seven employee positions through attrition and retirements, deferring hiring for 18 vacancies, and reducing special events spending.

Yet, it doesn't mean layoffs are in the offing.

"We're proud that we have never in the history of the village had to lay anybody off and we are optimistic that's never going to happen," Elk Grove Village Mayor Craig Johnson said. "In 17 years on the board, this is probably the toughest budget we've had to work on. We've cut now just about everything we can."

Officials said they hope to minimize the impact on residents and not let the cuts affect the quality of village services.

A discerning resident may notice the Fourth of July fireworks display is much shorter than the 22-minute shows of the past or that the Fourth parade has fewer entries. But the more noticeable cuts are behind the scenes.

All village employees - including the mayor, village manager, village attorney, department heads, nonunion employees, and police, fire and public works unions - will not receive pay raises in 2010. The village is freezing salary ranges at current levels, officials said.

Public works and fire department union employees would have received a 3.25 percent increase on May 1, per their contracts which expire April 30, 2012. The police union's contract is up for renewal and negotiations are ongoing for a two-year deal, but they also won't be seeing any increases the first year.

The three unions jointly amount to roughly 80 percent of village's 350 employees, including part-time staff and summer help. The pay freeze saves the village $850,000.

"I was very proud of what they did," Johnson said. "Our guys really stepped up. When they took the votes, it was unanimous. This is unusual. This is not the norm."

Johnson said the village is trying to live within its means and not eat too much into its reserves, which were $19 million 18 months ago, but will be down to of $13.5 million at the end of this fiscal year. The fund will dip below the four months of operating expenses officials like to maintain as a cushion by the end of the 2010 fiscal year.

The village has held back on raising its portion of the property tax levy for three years.

"If it doesn't turn around during the next fiscal year, we can't guarantee to do that in the future," Johnson said. "Employees have stepped up to help us hold the line, but we can't do that forever."

Village officials also are bracing for a possible dip in income tax revenues if the state approves a proposal to reduce municipalities' share from 10 percent to 7 percent, costing the village roughly $800,000.

"When the state government can't keep their own fiscal house in order, what do they do? They go out and steal the money from local municipalities," Johnson said. "It hasn't passed yet, but it could be done this spring, so it's going to hit us this next fiscal year. That's why we have to account for it."