Hoffman Estates' financial losses not as bad as feared

Though no one is celebrating or easing up on cost-cutting, Hoffman Estates village board members learned this week that the village hasn't suffered financially from the COVID-19 pandemic quite as much as anticipated.

But Village Manager Jim Norris, taking part in his final village board meeting before retiring next month, recommended Monday that the financial update be looked at not as good news, but merely as less bad news.

Some of the ways that village revenues stayed above their expected lows had to do with people shopping in grocery stores and other businesses more than had been anticipated, he said. Restaurants and hotels were particularly hard hit, Norris added.

Another step up from the spring's gloomy forecast is the number of building permits issued amid the pandemic, Norris said.

The village initially estimated a revenue shortfall of $6.5 million from its 2020 budget projection. Officials responded by identifying $3.5 million in cuts, leaving the remaining $3 million shortfall to be covered by reserves.

But so far, the village is $1.2 million above its pandemic revenue projections. That means the $3 million once expected to be covered by reserves is now anticipated to be only $1.7 million.

The fewer reserves needed in 2020 create more ability for the village to weather longer-term financial impacts of the pandemic, Norris said.

Hoffman Estates Finance Director Rachel Musiala added that the village's initial projections considered only one extended shutdown of the economy. If a second wave of COVID-19 necessitated another shutdown, Monday's good news could quickly be reversed, she said.

That's why administrators aren't recommending any changes to the spending cuts made for this year, and why Mayor Bill McLeod said the village board isn't feeling much temptation to change course.

"We cut a lot of spending when this first hit," McLeod said. "In some ways, it's surprising that it isn't worse."