No layoffs in Lake Zurich's belt tightening

Lake Zurich will be able to prevent layoffs and make up for a projected revenue shortfall next year by freezing hiring and putting off buying some big-ticket items, officials said.

Layoffs were among several options talked about last fall when village officials discovered an estimated $750,000 shortfall in revenue from a special taxing district in 2008 and 2009.

Village officials also considered borrowing $1 million without a referendum to make up for the deficit, but quickly rejected the idea, saying they needed to instead curb expenses.

"I think we need to get our house in order first," Village Administrator Bob Vitas said. "We're going to trim all the fat internally and get lean and mean in terms of operations. We don't expect to create new programs. We expect to just maintain services and go from there and stave off the financial woes until we can get in a better position."

Since Jan. 1, the village has had a hiring freeze. There are also a few retirements expected in the next year, and those people will not be replaced.

That along with roughly $1.4 million in cuts in all departments and a one-time transfer of $500,000 from the water and sewer fund should plug the deficit and leave enough cash on hand to maintain the village's credit rating, said Al Zochowski, village finance director.

Officials are anticipating $22.6 million in general fund revenues next year. Expenses will reach almost $23 million.

The budget cuts won't have an impact on current service levels but it's a temporary fix, Zochowski said.

"The deficit has been delayed," he said. "It's going to be hard to continue to provide the same service level, if we're going to have to keep going through this same exercise every budget season."

The cuts will help the village maintain a general fund balance of nearly $3.4 million or roughly 14.7 percent of operating expenses in hand.

Meanwhile, officials are looking for new ways to generate revenue by possibly increasing fees for building inspections, licenses and permits.

"If there's any big changes, that's where it's going to happen," Zochowski said.

Officials are anticipating new revenue next year of roughly $600,000 from red light camera violations. The cameras are expected to be in place at three village intersections by Aug. 1.

"With that, we may get through the 2010 year maintaining the current fund balance percentage that we have," Zochowski said. "By next fall, we will brief the board on a five-year budget plan."

The village board will have a final budget discussion meeting 7:30 p.m. Monday at village hall, 70 E. Main St.

A public hearing on the budget is scheduled on April 7. It is expected to be adopted April 21.