With new police and fire stations under construction, Palatine administrators have been seen as big spenders in some quarters of the village.
But the proposed $101.12 million 2011 budget looks to curb spending, slash the payroll and raise taxes to balance the books. There would be increases in water rates, property taxes and a new electricity consumption tax. Community policing would be eliminated.
“This budget has been by far the most difficult budget I’ve had to develop in my 20 years of municipal budgeting,” said Village Manager Reid Ottesen at a recent budget review. “There have been plenty of economic constraints throughout recent history, but none compared to the prolonged four-year economic crisis that is impacting our decision making.”
Electricity bills would jump 5 percent, adding $900,000 to village coffers, and property taxes would increase 4 percent, adding $844,000.
Village officials see an electricity tax as a stable source of revenue even in poor economic climates. It will make up for what’s been lost in income tax payments from the state.
Water bills would go up 33 percent under the spending plan. The rate would rise from $2.24 to $3 per 1,000 gallons.
That additional revenue would pay for infrastructure projects such as $427,000 in repairs and repainting the Smith Street water tank, $500,000 in water main replacements and extensions, and the purchase of a $325,000 emergency generator for the water system.
“For several years it has been discussed as part of the budget development that the water rate in Palatine was going to need an adjustment to fund the critical infrastructure improvements required to have a safe and dependable water system for future generations,” reads the village’s budget message. “During 2010, an engineering study was completed that looked at our long-term water system needs. The time is now to systematically upgrade and reinvest in our system.”
Property tax and utility tax increases could cost the average homeowner an additional $100 per year.
Even with the increases, village officials say water, property and utility tax rates are comparable to those in other municipalities.
They still didn’t sit well with residents Maria and Jerry Sroga, who attended Monday’s public hearing on the budget plan.
“The main reason we are here is to protest the water rate hike,” said Maria Sroga. “We have been residents of Palatine for 27 years.”
Water bill increases cause them to “want to run from Palatine” and “we’re almost to the point where we have got to leave Palatine because we can’t afford to live here anymore,” she said, adding that her bills are complicated by tree roots disturbing the water system.
Resident Roman Golash said there is “sticker shock” over the property tax increases.
Despite falling home values, “still it goes up, up and up…There comes a day of reckoning. At the rate it is going, it’s unsustainable,” he said.
“It seems like it’s never enough. It’s more, more and more and families are not making more,” Golash said. “I think other people feel the same way, that the trajectory we are on is not good at all. It’s bad.”
Under the plan, the village plans to nix 12 positions to save $1.7 million and also cut seasonal and summer part-time jobs by 50 percent. Vacant Fire Department posts would not be filled.
The budget and capital improvement plan totals $101.12 million with an operating budget of $61.72 million and the remaining for capital costs, TIF Districts, debt payments, transfers, insurance and pension costs.
The total went from $126 million in 2010 to $101.12 million in 2011 because bonds were issued for the new police and fire stations this year.
Construction started in July at the new 595 N. Hicks police headquarters. Costs have been tabbed at $23 million. The 8,700-square foot station at Quentin Road and Echo Lane is slated to cost $3 million.
Also as part of the proposed budget, the village will take $300,000 out of $18.24 million in reserve funds.
Red light camera violations are expected to generate $450,000 in 2011.
Councilman Scott Lamerand said the village had holes to fill in the budget from day one.
Pension costs rose $843,000 and state income tax payments to the village are expected to drop $900,000. Sales tax receipts are down 13 percent and motor fuel taxes are down about 25 percent.
Those are things Palatine has no control over, Lamerand said.
“Is it anybody’s fault? No, it’s not anybody’s fault,” he said. “It’s the economy as it is today and it’s impact on the village.”
Lamerand said “everybody gets it” and “there is a constant focus on reducing costs” in Palatine.
More public comment will be heard Dec. 6.
