Gurnee reserves remain healthy despite pandemic, village officials say
Economic lessons from 2008 helped the village of Gurnee weather the financial fallout of COVID-19, officials said this week.
Mayor Kristina Kovarik said after the 2008 economic downturn the village -- which levies no local property tax and is greatly reliant on sales tax revenue -- was in a bad way for several years.
"It took us until around 2013 to start our recovery," Kovarik said. "We learned our lesson."
Ever since, the village staff has prioritized setting money aside each year in case of another emergency.
The results of that preparation could be seen Monday night during a budget workshop led by Brian Gosnell, the village finance director, who said the village's reserves remain healthy despite the pandemic.
Gosnell said the village used $2.9 million of the reserves in the current fiscal year and plans to use just under $1 million from reserves in the upcoming fiscal year, which begins in July. But even after using about $4 million in two years, the village expects to have a reserve fund of $22.8 million, which is 55.3% of the planned expenditures.
Kovarik said she would prefer the reserve to be at 70% of planned expenditures but added she is glad the reserve is still healthy.
"I'm urging the board to be conservative," Kovarik said. "I don't want to bleed those reserves off too fast. It could be four years before we're back to a 2019 economy and can start saving again."
In addition to squirreling away money for a rainy day, the village staff also planned to respond to economic downturns with spending cuts that could be implemented quickly, without special board action. That included freezing hiring, not paying cost-of-living adjustments to employees and suspending promotions.
Kovarik said she is proud of village employees for making sacrifices.
"Village employees really stepped up to show their commitment to providing the services residents expect," Kovarik said.
"You don't see that very often, and it is a testament to Pat's leadership," Kovarik said, referring to Village Administrator Patrick Muetz.
During his presentation Monday, Gosnell said he expects the village's big revenue sources -- including sales, amusement and hotel taxes -- to recapture 75% of the COVID-19 loss this coming year and the remaining 25% the year after.