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Politics & Government

Council Moves to Accelerate Budget Process

Push for earlier process to become reality.

First steps were taken to accelerate Highland Park’s  at a special City Council meeting held to review the city’s financial performance for the first half of the year on Monday.

After City Manager David Limardi and his staff presented a report that showed the city meeting its financial projections, the campaign promise of and a push by the Council’s longest serving member, , for an earlier start to the process became a reality. 

“I’m really pleased the process itself will start early,” Rotering said. “We’ll have an opportunity for really meaningful policy discussions even sooner." 

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Limardi concluded his presentation to the City Council with a goal to have a proposed budget ready for review by October and the required public hearing on December 12. 

That's when questions came about accelerating the process. 

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“It always seems to go down to the last minute,” said. “If we can find a way to have an earlier vote it will be better for everyone.” 

“That’s why we’re meeting today,” Rotering answered. 

Before details of the earlier review process for the 2012 budget  emerged, veteran put the entire project in prospective. 

“This depends on us and when we get it,” Kirsch said, referring to the work city staff and Council members must do to move up the public hearing date. “We have to understand what you need from us to get ready sooner. We have to look at the back end.” 

Limardi explained his staff needed time to thoroughly explore all aspects of budget preparation before presenting it to the Council. 

“It depends on how good you want it to be,” he responded to Kirsch. Two weeks was the best he could promise without compromising quality. 

“I will talk to my staff tomorrow and we will see if we can move it up even more,” Limardi said after the session. “We are really focused on meeting the needs of the residents.” 

After the Council learned the timing, Rotering focused on accelerating discussions of policy issues going into the budget to give Limardi and his staff direction. 

“We can have policy discussions sooner,” she said. 

Effects of the Great Recession

While the city is meeting most of its revenue and spending projections, parts of the report showed the effects of the Great Recession that hit the country in 2008 are still continuing to affect the city’s financial planning. 

Sales tax revenue, the city’s largest single source of income, ran ten percent ahead of projection for the first three months of 2011, though it was 9.3 percent behind collections in 2008, according to a presentation made by Finance Director Elizabeth Holleb. 

After collecting more than $2.7 million for the first quarter of 2008, sales tax revenues fell to just over $2.3 million for the same period the next two years. Holleb projected a similar amount for 2011, but the actual collection was more at $2.5 million. 

Though a much smaller percentage of the city’s income comes from the real estate transfer tax, those collection results touched off even more alarm from some council members. The fee is a percentage of the amount of each real estate sale reflecting both property value and sales volume. 

According to Holleb’s presentation, Highland Park collected $507,000 from the transfer tax for the first five months of 2008, $319,000 in 2009 and $525,000 in 2010. The city forecast $524,000 for 2011 but only collected $378,000 between Jan. 1 and May 31 reflecting a 28 percent shortfall from projection. 

“The fact 40 percent of homes with mortgages are underwater is really frightening,” Mandel said, referring to homes worth less than is owed against them. 

Rotering suggested the city have a professional economist talk to the Council about the lingering effects of the recession.

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