Palatine is on the verge of balancing next year's budget in the midst of a recession, but not without a price.
"Unless some revenue source all of a sudden emerges, we're looking at involuntary position cuts," Village Manager Reid Ottesen said. "The budget reflects the uncertain economic climate we live in."
Seven positions, four of which were part-time, were eliminated through attrition. Now, Ottesen and his staff have to identify $761,000 in additional expenditure reductions in order to balance the operating budget. He expects $400,000 will come through employees taking early separation packages. However, layoffs will account for the remainder.
Once layoffs close the outstanding gap, the operating budget will have increased 1.5 percent to $61.6 million compared to the 2009 budget. The entire 2010 budget, which includes capital projects, TIF districts, debt service, insurance and pension requirements, will decrease 12.5 percent to $127.3 million.
During a budget workshop held Oct. 31, Ottesen and many of the councilmen used the forum to bash the current pension system. Palatine's state mandated pension costs for police and fire alone represent a $1.6 million increase.
"This one expense has made the difference between having a budgeted surplus and potential property tax relief as opposed to service cuts, personnel reductions and other fee increases," Ottesen said. "The system is absolutely broken."
Councilman Dan Varroney agreed: "The formula for that pension must change or our stockholders are going to suffer. That is the 800-pound gorilla."
To help fund the pension obligation and other expenses, Palatine residents will have to pay minimally more:
• Vehicle sticker fees go up $5, which would raise $200,000 more for the street program.
• Water rates will rise 12 cents per 1,000 gallons to $2.12. Palatine's water rate is well below the area average and the typical homeowner would pay $14.40 more annually.
One cost-cutting measure the council hopes to reverse is the proposed elimination of one of two police officers stationed at Winston Campus and Sundling Junior Highs. Palatine Township Elementary District 15 pays only 25 percent of one officer, while the village pays for the remainder.
Ottesen wants Inverness to provide some funding because part of the village feeds into Sundling. He also hopes to see more money from District 15, which will receive more than $1 million from Palatine's Dundee Road TIF district. Palatine paid the last of its debt service in the TIF district and has no scheduled expenses there next year.
Other personnel changes in the police department include moving two officers from the station and into patrol duties, cutting overtime costs by one-third.
And keeping to his campaign platform, Mayor Jim Schwantz is cutting his travel budget by 70 percent.
A public hearing on the 2010 budget will take place Dec. 7. It will be adopted on Dec. 14.