FRG’s general fund in the red next budget

For the second year in a row, the village of Fox River Grove will have to dip into reserves to deal with a budget deficit.

A deficit of up to $300,000 is projected in the general fund for fiscal year 2011-12, which starts May 1, Village President Robert Nunamaker said.

At the end of next year, the village will have at least four months’ worth of reserves in the general fund, Village Administrator Art Osten said Friday. “Prudent fiscal policy” calls for three months of reserves, he explained.

The general fund’s operating expenses, including capital projects, are approximately $4.5 million, Osten said.

“Our budget is very close to being balanced if you don’t include capital and infrastructure projects,” Osten said, declining to give specific figures until the budget is finalized early next month. “Revenues equal or exceed expenses for the general fund for operating and debt service.”

Capital projects for next year include a new public works garage, for which the village borrowed about $3 million in 2010. Federal funds reimburse 35 percent of the interest payment, Osten said. It’s unclear, however, if the garage will be built because of a lawsuit filed by residents who live near the proposed new site. Building costs will be up $112,000 next year, Osten added.

The village’s liability insurance premium will increase by about $100,000 due to workers’ compensation claims. Also, the village’s police pension funding will increase by about $20,000, and medical insurance costs are anticipated to be up by 13 percent, Osten said.

No decisions have been made yet about salary increases for village staff, Nunamaker said.

The final budget will be available for viewing by April 8 online or at village hall, 305 Illinois St.