Palatine plans no property tax levy increase in 2021

Despite the economic challenges brought by the COVID-19 pandemic, the village of Palatine is not planning to increase its property tax levy next year with a proposed budget that focuses on core services, officials said.

The proposed 2021 budget is balanced at $118.1 million - a 3.76% decrease compared to this year's budget - including an operations budget of about $77.1 million and a capital budget of about $41 million. "Every effort has been made to control costs while meeting the needs of community," Village Manager Reid Ottesen said at a special budget meeting Saturday.

Council members praised the work of village staff. "I'm actually besides myself looking at this budget," said Councilman Kollin Kozlowski, who chairs the business, finance and budget committee.

The proposed budget does include an increase in water rates of 25 cents per 1,000 gallons, Ottesen said. The village's water rates, currently at $4.80 per 1,000 gallons, would remain below those in many other Northwest suburbs, he said.

To offset an increase in credit card fees paid by the village, the 2021 budget includes a general fee hike of 4.25% for discretionary things like zoning fees, building permits and business licenses, but not for required things like vehicle stickers, Ottesen said.

The village this summer took steps like using reserves and eliminating five full-time and nine part-time positions - a combination of vacant positions and layoffs - in light of the pandemic. Those positions were permanently eliminated in the 2021 budget, which also keeps vacant two police officer and three firefighter positions, Ottesen said. Fire Chief Scott Andersen and Police Chief Dave Daigle said keeping those positions unfilled is OK in the short term but can't be a long-term solution.

Altogether, in 2021 the village with an estimated 67,000 residents will have 327 full-time employees - compared to 367 full-timers in 2008 - and 54 part-time and seasonal workers.

The biggest revenue loss will be the village's share of income taxes, expected to decrease by $1.27 million due to unemployment during the pandemic, Ottesen said. However, use tax revenues are expected to increase by nearly half a million due increased online purchasing by residents, he said. The village also expects a 15% increase in building-related fees next year.

The village already had planned to spend less in capital projects in 2021, a fortunate coincidence, Ottesen said.

Projects budgeted next year include $2.4 million to resurface 34 streets - more than in a typical year, Ottesen said - $650,000 in stormwater management, $150,000 to resurface the Metra train station lot and $250,000 to add more video security at the parking deck downtown.

A planned $240,000 expense for a bike path connection at Smith Street into the Cook County Forest Preserve includes $115,000 from Cook County, with the rest split between the village and the Palatine Park District, Ottesen said. That will complete the first major phase of the village's bicycle transportation plan.

Village property taxes represent about 10% of Palatine homeowners' tax bills. Palatine either decreased or kept its property tax levy flat from 2012 to 2017, and increased it in the last three years only to fund public safety pension obligations. Next year's pension funding contributions will be $14.1 million, a 5.77% increase over this year that includes accounting for additional retirees, Director of Finance and Operations Paul Mehring said.

A public hearing on the proposed budget takes place Nov. 16. The council is expected to adopt the budget Dec. 7.