Schaumburg's Budget Aims to Preserve Existing Services Amidst Economic Uncertainty

The Village of Schaumburg has developed a Fiscal Year 2020/21 budget that aims to preserve existing services as much as possible given the economic impact of the global coronavirus pandemic on Schaumburg's local economy is still unknown. The proposed budget, however, accounts for significant realized and projected local tax revenue reductions as a result of the continued economic shutdown.

The Village Manager will present the proposed financial plan to the Committee of the Whole at a special meeting and public hearing to be held at 6 p.m. Tuesday, April 28. At 7 p.m., the budget will be considered for adoption as part of the regularly scheduled Village Board meeting. To encourage social distancing, those interested in participating in the Committee of the Whole or the Village Board meeting are asked to do so remotely via Zoom video conferencing platform. Meeting agendas and remote login instructions can be accessed through the village's calendar at www.schaumburg.com.

The village's annual budget proposes revenues and expenditures that are projected for the fiscal year which begins May 1, 2020, and ends April 30, 2021. The FY 2020/21 budget was developed based on prudent assumptions with limited information. Careful monitoring of economic and societal factors will allow for any necessary adjustments to be made as the fiscal year progresses.

In support of residents and businesses, the budget contains a 5 percent reduction to the local property tax levy approved by the Village Board last year as well as a reduction to the scheduled water and sewer rate increases that had been approved by the Village Board in 2016. These relief measures are meant to offer financial relief to residents and businesses. No new tax increases are proposed in the budget.

The financial plan for FY 2020/21 includes revised revenue projections and proposed expenditures to account for the anticipated loss of approximately $14 million in local tax revenues due to the coronavirus pandemic. These assumptions are based on the local economy restarting in June 2020 with activity returning in earnest by August 2020. Should the stay-at-home order be extended into the summer months or the impact is more severe than projected, the village will need to revisit the financial plan to make any necessary adjustments. Alternatively, if recovery occurs faster than expected, or significant assistance from the federal and/or state government is received, the village can consider restoring identified expense reductions.

The FY 2020/21 budget has projected total revenues and other financing sources of $262 million and projected total expenditures and other financing uses of $249 million. The surplus is attributed to two planned bond sales needed to fund capital improvements. Total revenues across the village are down 4 percent from the FY 2019/20 amended budget primarily due to the challenges from the coronavirus pandemic.

Highlights of the proposed budget include funding for a new Small Business Grant Program that will assist with facility improvements to spur revenue growth, job creation, and investment.

Infrastructure projects include the first phase of construction on a new 12-acre park to be located in the 90 North District and a new bike path on the north side of Higgins Road from Lifetime Fitness west to the village limits. This bike path project will utilize $620,000 in federal grant funding to reduce the village's share to just $123,000.

Additional shared funding initiatives include major road projects and new pedestrian signals. Funds are included to complete reconstruction of Woodfield Road from East Frontage Road to Meacham Road that started in 2019 and pursue improvements to four additional roadways that are in various stages of design and could utilize grant funding for construction in the future. The village also plans for pedestrian signal improvements at National Parkway and Higgins Road, Wildflower Lane and Schaumburg Road, Weathersfield Way and Barrington Road, and National Parkway and Schaumburg Road. The village has received funding from the State of Illinois that will cover 93 percent of these project costs.

Aside from moving forward with various projects, the budget also identifies proposed reductions to alleviate the impact of the coronavirus pandemic. While reductions have been made across much of the village's budget, the greatest reductions were made to the General Fund in order to address an expected deficit of $11.7 million between the current and the proposed fiscal years.

"Schaumburg, more than other communities, will realize the immediate impacts of a local economic shutdown with 65 percent of its General Fund revenues directly tied to the local economy and consumer spending," said Director of Finance Lisa Petersen. "The proposed budget reflects actions the village intends to take so that it can match expenditures with anticipated revenues while continuing to preserve key programs and services."

Highlighted General Fund budget reductions include the following:

Hiring freeze for all current and projected vacant positions (41) as of May 1 ($2.4 million reduction)

Elimination of annual funding for vehicle, building and technology replacement funds ($3.8 million reduction)

Deferments of capital projects ($3.1 million reduction)

Elimination of travel, meetings and training ($600,000 reduction)

Reduction in funding of other programs and services that had been identified as necessary, but not essential to the village's ability to continue delivering services ($1 million reduction)

Adjustments are also proposed in the Capital Improvement Plan, which includes the deferment of $6.4 million in projects. The annual street program, which has been funded at $8 million since FY 2017/18, will also remain at that amount despite approval earlier this year to increase program funding by $2 million to repair additional streets in the village.

"Given the current state of economic uncertainty, the proposed budget has been crafted to weather the storm while still ensuring Schaumburg can offer a high quality of life to those who live, work, and visit here," said Village Manager Brian Townsend. "Even after the budget is adopted, it will be important for the village to continuously monitor the economic climate and make adjustments accordingly so that the village can continue to serve the community in a fiscally responsible manner."

For more information and to view the proposed FY 2020/21 budget, visit the Village of Schaumburg website at http://bit.ly/2cZqm0p, contact Lisa Petersen, Director of Finance, at lpetersen@schaumburg.com or dial 311 in Schaumburg.