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Mt. Prospect offers buyouts to avoid layoffs
By Sheila Ahern | Daily Herald Staff
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Published: 9/30/2010 12:00 AM

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Layoffs that could affect every department and eliminate as much as 10 percent of Mount Prospect's work force are coming if some longtime employees don't accept buyout offers, according to an internal village memo obtained by the Daily Herald.

The memo, issued Sept. 17, gives employees 45 days to decide if they want to accept the buyouts, said Assistant Village Manager David Strahl.

In all, 42 employees are eligible for the buyouts. Strahl declined to detail the offers or say how many employees have accepted them so far.

"I can't comment about that," he said.

The memo was written by Village Manager Mike Janonis, but neither he nor Mayor Irvana Wilks was available to comment Wednesday, Strahl said.

According to the memo, the village is facing a $3 million general fund deficit in 2011 and a $4 million deficit in 2012 if nothing is done. Raising property taxes or dipping further into the village's reserve fund are out of the question, Janonis says in his memo.

"We have tapped our revenue sources to the tipping point," Janonis' memo states. "People, regardless of how they feel about villages services, will rebel against all but the most modest tax increases."

The problem, according to the memo, is that village expenditures have risen 3.5 percent to 4.5 percent while revenues have increased only 2 percent to 3 percent.

And neither increasing the property tax levy nor the redevelopment of Randhurst and its $1 million in expected additional sales tax revenue will fill the gap.

"While property tax receipts are one of our major revenue sources, each percent increase in the levy generates only $152,000, meaning it would require a 20 percent increase in the levy to wipe out a $3 million deficit," Janonis writes.

Strahl puts in another way: "We need a new Randhurst every year."

There are 318 full-time employees in Mount Prospect, Strahl said. About 80 percent of the village's budget pays for salaries and benefits.

In August, Mount Prospect finance officials put on a budget workshop and talked about their grim 2011.

In 2008, the village's fund balance was $12.5 million. In 2011, that balance is expected to be only $5.8 million, according to Finance Director David Erb's August projections.

The $3.1 million deficit resulted from falling revenues in home sales tax, real estate transfer tax, utility taxes and investment income, Erb said. Some aren't expected to recover anytime soon. Transfer tax receipts are off almost 70 percent from their high point in 2005.

Mount Prospect trustees will start discussing the 2011 budget in October and are slated to approve it in December.