FY2023-24 Proposed Budget

I am pleased to provide you with a balanced Budget for the fiscal year beginning May 1, 2023 and ending April 30, 2024. The budget review process will include a Committee of the Whole Budget Workshop on March 21 at 5:30 p.m., the public hearing on March 21, at 8:00 pm, and the final approval at the April 18 Village Board Meeting.

• Financial Strength. Maintain the Village’s strong financial position by monitoring the long-range financial plan, sales tax-producing businesses, and AAA bond rating.
• Infrastructure. Continue to strengthen the Village’s infrastructure through the implementation of the 10-year capital plan with an emphasis on water, storm, and streetscape initiatives. Leverage financial resources through partnerships and grants.
• Pensions. Continue to strengthen the Police Pension Fund.
• State/County Initiates. Continue to work with IDOT and Cook County to improve the condition, safety, and accessibility of regional roads with an emphasis on Happ Road, Skokie Valley Trail, Sunset Ridge Road, and pedestrian and bicycle programs.
• 2040 Vision Plan. Advance the goals of the 2040 Vision Plan with a focus on the update of our Zoning Code, Design Guidelines, and Subdivision Code.
• Business Support/Economic Development. Continue to strengthen local business districts, encourage economic development, support property values, and protect the character and vitality of Northfield through business outreach, branding, signage, website upgrades, and promotional programs.
• Green Initiatives. Continue to seek opportunities to incorporate sustainable practices and programs into the Village operations and educate the community on sustainable practices. Support community initiatives that help keep Northfield clean and green.
• Intergovernmental Initiatives. Continue to explore options to collaborate with neighboring communities to improve services and efficiencies or reduce costs.
• Cultural Attractions. Continue to work with the Park District and other entities to sponsor and promote cultural attractions and other special initiatives that promote the Village’s identity.
• Communication to Residents. Strengthen our digital footprint, expand educational programs, and use the Village website, eblasts, newsletter, blogs, and social media to improve citizen awareness of Village actions, initiatives, and policies.
• Cost of Living. Work to keep property tax and other costs, fees, and expenses low for residents by being prudent fiscally, maximizing efficiencies, and cost-saving initiatives.

The FY22/23 is projected to end the year better than anticipated. The adopted General Fund budget contemplated a $71,730 surplus at the end of the year, not including the planned additional $355,000 transfer from the general fund to the capital fund to cover the Special Board projects. Based on our year-to-date information, we now anticipate ending the year with a surplus of $133,785 which includes the additional capital transfer and the mid-year budget amendments for the 20th police officer and $250,000 additional contribution to the police pension fund. The year-end highlights are as follows:

• Sales tax revenues are projected to be 16% over budget, coming in at $3.4 million vs a budgeted $2.94 million. Home Rule revenues are projected to be 19% over budget, coming in at $1.58 million vs a budgeted $1.33 million.
• Water rates increased by 5% and the Village began the implementation of the new water meter replacement program and remote read system. That work was paid for using 100% of our Village's American Recovery Plan Act Funding (ARPA) and the balance from the Water and Sewer Fund. The first half of our ARPA funding of $366,476 was received last fiscal year and the second half was received this fiscal year. In total, the Village received $732,952 in ARPA funding.
• Staffing was adjusted to meet essential services and the changes included: hiring a temporary 20th police officer, new water billing clerk, new accounts payable clerk, two new police officers, several police promotions, a full-time planning technician, and numerous firefighters/paramedics.
• The Phase II engineering contract for the Happ Road project was approved and that work is ongoing. 100% of the costs are being covered by a Surface Transportation Grant with the matching funds covered by Cook County.
• The Phase II engineering contract for the Skokie Valley Trail project was approved and that work is ongoing.

Thanks to very strong revenues and controlled spending, the Village's finances remain very strong. Expense-wise, the Village continued to operate in a fiscally responsible manner. Overall, expenses are anticipated to be $563,771 or 4.5% over budget. $355,000 of the overage is not truly an overage, but simply a different way we are presenting capital transfers from reserves. Prior to this year, transfers from reserves were shown "below the line". Those transfers will now be included in with all other interfund transfers in the financial statements. The General Fund is expected to end the fiscal year with a $133,785 surplus. This will result in a General Fund reserve balance of $8,868,044 million or about 8.28 months of operating expenses. This is well ahead of our six-month reserve policy.

In the Water/Sanitary Sewer Fund, FY22/23 revenues are expected to come in at $3,909,933, which is $111,233 or 3% over budget. Projected expenditures are expected to be at $3,487,550, which is $15,316 or .4% under budget. At the end of FY22/23, the Water and Sanitary Fund is projected to have a working capital balance of $2,507,029. This is due to limited capital work, slightly lower overall general expenses, and slightly higher revenue.

The FY23/24 General Fund Budget projects $13,647,849 in revenue and $13,522,120 in expenses. Revenues are estimated to be $1,628,469 (13.5%) up over FY22/23 budget. Property taxes are comprised of a 1.4% increase in 2022 taxes (collected in 2023) and 5% increase for 2023 (collected in 2024). These increases are in accordance with the tax cap which allows for increases consistent with the CPI, or 5%, whichever is less. The budget anticipates increases in the local income tax, Local Government Distributive Fund, and home rule sales tax based on the projections provided by the Illinois Municipal League. General sales taxes are anticipated to increase by 5% and home rule sales tax by 2% over the last budget year. The only projected change in sales tax is $300,000 projected from the new cannabis facility that is anticipated to open in September 2023. Given the 5.4 % inflation rate, we are pleased that we were able to keep expenses in line and provide for a 4% cost of living adjustment for salaries, an 18% increase in our healthcare expenses, a 20% decrease in the employer's rate for IMRF, and only a 2.5% increase in water rates.

With an estimated $125,729 surplus projected at the end of FY23/24, the General Fund reserve balance will be $8,994,773. This amount includes an extra $300,000 transfer from the general fund to the capital fund to help strengthen that account. It does not provide any transfers for Special Board projects. This represents 7.96 months of operating expenses and is in compliance with the Village’s fund balance policy of maintaining a minimum reserve equal to six months of operating expenditures.

Revenue

Total revenue up 13.5%

Property Tax remains in compliance with tax caps

Home Rule Sales Tax up 22%

Sales Tax up 35.4%

Utility Taxes down 0%

State Income Tax up 6.67%

Licenses and permits down -.35%

Fines and Alarms down -13.7%

Expenses

Overall Expenses up 10%

COLA adjustment of 4%

IMRF rate down 20%, PPO rate up 2%, HMO rate up 4.1%

Police Pension contribution up 4.6%

Budget includes an extra $300,000 increase to CIP fund in addition to the cost-of-living increases for equipment and vehicle transfers.

Estimated Year End Surplus of $ 125,729 and a fund balance of $8,994,773on 4/30/24

Revenue

Total Revenue up 5.2%

Includes a 2.5% water & sewer rate increase effective May 1

Rate increase of 2.5% from $11.03/100 cubic feet to $11.30/100 cubic feet

Assumes the same amount of water usage as budgeted in FY22-23.

Expenses

Total Expenses up 14.3%

Salaries flat & benefits up .07%

Water purchase costs up 5.46%

$1,027,250 in capital funding

$150,639 in transfers to the Capital Equipment Fund

Moving to a "pay as you go" model till interest rates go down.

Projected Fund Balance of $2,501,780 on 4/30/24

Click the below hyperlinks to access the detailed budget reports by department of fund

Operating Funds:

• General
  • Administration & Finance
  • Community Development - Building & Zoning
  • Police
  • Fire-Rescue
  • Public Works
• Water/Sewer

Capital Improvement Plan:

• Capital Improvement/Equipment Fund
  • 10-Year Capital Project Plan

Specialized Revenue Funds:

• Police Pension Fund
• Motor Fuel Tax Fund
• Foreign Fire Insurance Fund
• 2016, 2017, and 2019 Bond Funds
• Storm Sewer Improvement Fund
• Rolling Ridge Special Service Area Fund
• Longmeadow SSA Bond and Interest Fund
• American Rescue Fund

Village Board Project Suggestions:

• Board Projects

Appendix:

• Appendix/Additional Material