Elmhurst City Council Takes a Look at a Budget that's 'Balanced But Throttled'

As they presented alderman with the proposed fiscal year 2011-12 budget, city staff said they were cautiously optimistic that Elmhurst's financial hard times were now in the rearview mirror. Still, the city's spending plan is constrained to allow a rebuilding of funds.

“We're not out of the woods, but it's beginning to look much, much better,” City Manager Tom Borchert told alderman.

The budget, which is available on the city's Web site, includes about $50 million in expenditures in the general fund. Borchert emphasized that the spending was “throttled” to allow the city to start replenishing the working cash fund balance, which 3rd Ward Alderman Susan Rose characterized as a “rainy day” fund. She noted that the city could have used more of this money in the years before the recent economic doldrums but decided not to.

“We wisely held on to that until there was a downpour,” she said.

The council's policy is to have an amount equal to three to four months of operating expenses on hand, or at least around $9 million. At the end of this fiscal year, the city is projecting there will be about $6 million.

According to a memo in the budget document, “sales tax remains the single greatest source of revenue in the city's general fund,” with about 25 percent of those revenues coming from auto sales and repairs. Elmhurst Ford last month joined the list of auto dealerships that have closed in Elmhurst. The volatility of this industry is a major reason the city needs to build up its working cash fund balance, the memo reads.

Borchert cautioned that proposed 2011-2012 spending on maintenance and infrastructure is lower than it should be. He also noted that, given current conditions, staff has projected a downward trend in revenues in 2012-2013.

In response to questions from aldermen about fluctuations in expenses over the next few years, Borchert said this was due to planned capital projects in each year, including, for example, proposed work on the Addison Avenue

Alderman will review various pieces of the budget in upcoming weeks, and the public can offer input at a hearing on March 21. The budget is scheduled to be approved on April 14.