Art of Compromise Allows Unanimous Passage of Village Budget

The third time is apparently the charm for the village of Lake Zurich’s new $44.5 million budget, as the board of trustees unanimously approved the document at a special budget meeting Wednesday night.   

In contrast to the normally lengthy meetings, the board approved the budget and adjourned the meeting within 15 minutes of its start.

Lingering issues brought up by trustees caused passage of the fiscal year 2011-2012 budget to be held up at both the April 4 and April 18 board meetings. The document was approved with three days to spare before the April 30 deadline.

“The compromise came about as a result of internal discussions between my office and each member of the board,” said Bob Vitas, village administrator. “Together we addressed concerns so we were able to adopt the budget during the calendar year which is required by state law.”

Among the concerns that were addressed was the transfer of $500,000 from the Water and Sewer Fund to the General Fund. 

The funds will instead come from the General Fund Reserve to make up for the loss of revenue.

For the last several years, the village has in essence ‘charged’ the Water and Sewer Fund for operating it as a separate utility.  The charges have been justified as reimbursements for accounting, finance and administrative work.

The funds would then channel into the General Fund for expenditures made on behalf of the Water and Sewer Fund.

“Funds from the General Fund Reserve will be used to balance the budget, in lieu of the $500,000 transfer not being made from the Water and Sewer Fund to the General Fund,” Vitas said.  

Trustees had dug their heels in and argued the transfer was not justified, in light of an imminent 40 percent water and sewer rate increase proposed by consultants back in 2010.

“The proposed water and sewer rate increase will not be implemented now; we will revisit the issue once an operational audit and cost allocation study are completed, so we understand how much money should be charged to the fund and how our departments are functioning across the board,” Vitas said.

The goal of the village is to have both the study and audit completed before the end of the fiscal year first quarter, on July 30, so that adjustments can be made to the budget if needed.   

Vitas said by the beginning of the second fiscal quarter, on August 1, a decision will be made about any water and sewer rate increases, and will be based on results of the study.

“The budget we will be looking at on May 1 could look completely different on August 1 after the cost allocation study and operational audit have been conducted,”  Vitas said.

In addition to examining the Water and Sewer Fund, the village will also be looking at vacant positions.

“We have been juggling openings for the last few years while dispersing responsibilities when positions were either reduced or abolished,” Vitas said.

“But this type of thing is happening across the entire spectrum where businesses and organizations are handling the same work load with less personnel to do it,” Vitas added.

Administration will also impose a moratorium on hiring to fill vacant or replacement positions, though Vitas said that will only be in effect for the first quarter of the fiscal year and pending the outcome of the audit and study.

Vitas added that his office will also look in to bringing back the ambulance that has been out of service for the last two years.

“I feel good for the board; I’m hoping that this is a new start not only for the fiscal year but for the new board starting May 2,” said Vitas. “We have a balanced budget.”

The General Fund Reserve, which will now be used to fill the hole left by the abandoned Water and Sewer Fund transfer, will have a balance of $3,525,791, which Vitas says is still a healthy balance.