Lombard ditches fiscal year for calendar year budgets

There’s the calendar year, the school year, plenty of different religious years, and, for most governments and businesses, the fiscal year.

But Lombard trustees decided Thursday night to do away with the most arbitrary of the bunch — the fiscal year.

The village will switch from a June 1 to May 31 fiscal year for budgeting purposes, to a Jan. 1 to Dec. 31 calendar year.

The first calendar year budget will begin Jan. 1, 2013. But the village’s current fiscal year 2012 budget expires May 31, 2012 — seven months before the first calendar year budget would take effect.

To account for the gap, trustees will approve two separate financial documents during budget proceedings, which are set to begin later this month, Finance Director Tim Sexton said. One will cover the seven months between June 1, 2012 and Dec. 31, 2012. And the second will cover the year between Jan. 1, 2013 and Dec. 31, 2013.

Switching to a calendar year for budgeting will save time and eliminate confusion by allowing money for construction projects to be budgeted in the same year in which the work occurs, Sexton said.

The tax levy won’t be scaled down to adjust to the shorter, seven-month budget, and neither will the fact the village needs to pay for an audit of the document, about a $20,000 cost, Village Manager David Hulseberg said.

But Sexton said those disadvantages will be overcome by the benefits of budgeting by calendar year instead of an arbitrary fiscal year.

Lombard won’t be the first community to switch to calendar years, as Aurora, Wheeling and Orland Park are among those that already have made the change, said Tom Bayer, village attorney.