East Dundee trustees get first taste of budget proposal

Major areas of revenue may be on a downward trend - and the village's largest retailer is expected to move out - but East Dundee village staff members have found ways to develop a budget that has the general fund on the positive side.

Trustees at Monday's committee of the whole meeting discussed the village's preliminary budget and will work with staff to refine a final budget for the fiscal year that begins May 1.

Village Administrator Frank Koehler said the village's sales tax revenue decreased about 25 percent in the past two years and income tax revenue, which the village collects from the state, has dropped about 18 percent. But despite these declines, coupled with the uncertainty at the state level as legislators deal with a deficit of more than $6 billion, village staff delivered a budget that is $122,000 in the green.

"Despite all of the doom and gloom, we are presenting a budget that is $120,000 to the good," Koehler said. "We are not coming in here, like we did last year, with a first draft that had a gap between revenues and expenditures. "

Projections show the village's general revenues in 2010-11 at $3,530,473, while expenditures are estimated at $3,408,842, an almost 6 percent reduction over the current year's budget.

In an overview of the budget, Koehler says the village's sales taxes are affected on two fronts: the closure of several retail stores and the reduced level of retail activity. For the fiscal year ending April 30, 2009, sales tax revenues amounted to $1.439 million and village staff predict that figure could drop a further 5 percent to $1 million next year.

"The sales tax decline wasn't as bad as we thought, but we predict further erosion of sales tax revenues," said Koehler, referring in part to the anticipated relocation of Walmart to West Dundee.

To make up for part of the losses, the village has reduced the building inspector position to part time, eliminated wage enhancements and removed the financial consultant position.

Koehler said the village is not predicting rate increases for water and sewer services in the next fiscal year. The village will need to borrow $3 million to complete the water pumping and softening facility.

The village board will further review the budget before adopting the budget. A public hearing is tentatively scheduled for Monday, April 19.