Fox Lake adopts $28.3 million budget with $260,000 deficit fund

Fox Lake officials said they know they have fallen into a deep financial hole.

But, those same officials have also said they can climb out with the right plan in place.

The first part of that plan was approved Tuesday when trustees voted to adopt a $28.3 million budget Tuesday that includes a general fund deficit of $260,000.

That budget includes five layoffs, though officials said the layoffs could be curtailed depending on employee attrition and additional cuts within the next year. They also hope to collect enough money to offset nearly the entire deficit from the county, through a host fee for the village's waste treatment plant.

"The budget is merely a guideline that is used to show us a direction we want to go," said Mayor Ed Bender. "We can continue to make cuts and change the budget as needed depending on how things change over the course of the next year."

Fox Lake Treasurer John Harahan said general fund revenue is projected to come in at about $7.5 million in the next fiscal year, which starts July 1 and ends June 30, 2010. He said general fund expenditures fall in at a little more than $7.7 million.

He said the shortfall can be directly pinned on the weak economy, which has caused a drop in sales tax revenue and the closure of two car dealerships, and also a reduction in new building permits.

He said the village took in about $2.7 million in sales tax during fiscal year 2008-09, but only projects $2.5 million in 2009-10. He added the village issued $290,000 in new building permits in fiscal year 2007-08, but only about $150,000 this year in 2008-09.

"Plus, our sales tax is already behind by about $66,000 this year," he said.

Trustees approved the budget by a 5 to 1 margin, and debated whether the budget must be followed to the letter.

Trustee Kevin Burt said the deficit could be trimmed after negotiations are finished with Lake County over a contract for the use of the village's wastewater treatment plant.

Some homes in Ingleside are hooked into county-owned sewer lines that connect to the Northwest Regional Water Reclamation Facility, owned by Fox Lake.

He said the village wants the county to pay a host fee for allowing county sewer lines to dump into the treatment plant on Rollins Road.

Should the proposed $250,000 host fee be included in the budget, the deficit could be trimmed to about $10,000, he said.

"So, right now, the budget that was approved does not include the host fee," he said, adding the budget can be adjusted to offset additional revenues and expenses.

But Trustee Greg Murrey, who voted against the budget, claims the document was a "good beginning," but that the host fee money is earmarked for separate projects, not to make up for a loss in the general fund.

"Yes, this document is a spring board, but we need to learn how to spend money differently," Murrey said.