Fox River Grove is about to be debt-free. How did the village do it?
Towns often brag about public amenities, vibrant shopping areas, entertainment venues and the services they offer residents, but few can boast being debt-free like Fox River Grove.
The village board Tuesday voted to pay off the village's outstanding debt - roughly $3.2 million - a move expected to yield about $280,000 in interest savings during the next 10 years.
How did the 100-year-old town of roughly 4,800 people manage it? Through belt-tightening and cost-saving measures, Village Administrator Derek Soderholm said.
Since 2013, officials estimate that staff reductions of about 20% - there are now 22 village employees - have resulted in about $2.3 million in operating savings.
The village also has used technology to find job efficiencies and tapped the private sector to provide some services. Those savings are expected to continue at an estimated $600,000 annually in future years.
"What we try to do year after year is keep those expenses as low as possible and operate as effectively and efficiently," Soderholm said.
The village's operating budget is roughly $4 million, and the projected general fund balance at the end of this fiscal year is roughly $1 million, or six months of operating expenses. Its projected capital fund balance at year end is $960,000.
The $3.2 million outstanding debt is what remained of two loans from 2010 - $1.2 million for a road project and $3 million for a new public works facility at Lincoln and Hillcrest. Without early retirement, they would have been paid off in 2024 and 2029, respectively.
"A lot of communities have debt. If we keep this money in the bank, we would have earned a nominal interest on it," Soderholm said. "Our overall goal here is to put the village in a financial position where we can handle a large economic downturn. We want to be able to withstand any kind of changes or hits to our budget and still be able to keep the doors open."
Soderholm said officials also aim to fully fund police pensions sooner. The pension fund is now funded at 36%.
"We have put additional funds beyond those required (pension) contributions every year," he said.
The village has nine full-time officers, including the police chief.
Officials don't anticipate needing a loan in the foreseeable future, with no major projects in the works. Road resurfacing and other capital needs will be funded through existing revenues, as has been the practice for the last five years, Soderholm said.
A loan may be needed to upgrade the village wastewater treatment plant, should Illinois Environmental Protection Agency requirements and standards change. That's not likely to happen for another 10 years, he said.