By Kevin Boneske
Staff Writer
HOBART – Budget-related midyear modifications were approved Tuesday, Aug. 6, by the village board.
Village Administrator Aaron Kramer presented the amended budgets for Hobart’s general fund and the two Tax Increment Districts, which he called Phase 2 of the budget cycle.
“We did Phase 1, where we reviewed and updated the five-year capital plan,” Kramer said. “Once that is put to bed, then I sit down with the financials. We have the six-month mark passed to see how we’re doing in all of our budgets. If we need to make changes and amend them, we bring them to you so you can officially adopt them.”
Kramer said the proposed budget amendments do not require a public hearing or have to be published in advance, but publication of the changes is required after they are approved.
“After this is complete, we’ll start developing next year’s budget, and wrap that up September through November,” he said. “And if we need to amend the budget one last time, we’ll do that in December.”
Kramer noted the 2019 general fund budget is being increased by more than $104,000 to $3,643,733 to take into account an increase in revenues from an assorted variety of line items, with the biggest increases coming in court fees, projected interest and park fees.
“Park fees brought in about $39,000,” he said. “We’re seeing a marked increase in the revenue coming in from the police department, the Hobart court fees. In fact, we’re projecting an extra $16,000 over our original budget in that fund. We’ve also been doing a little bit better on interest on our available cash accounts.”
Though general fund revenues are projected to increase by more than $104,000 above the original 2019 budgets, Kramer said that doesn’t mean Hobart will have that much of a surplus for the year.
The amended general fund expenditures for 2019 are also shown to increase by more than $104,000 to reflect a balanced budget, but Kramer said that doesn’t mean all that money will be spent this year.
“In the public works, I did put extra money into the overtime, based because of the winter storms and then our summer flooding has caused a little havoc with the overtime budget,” he said. “I did ramp up fuel costs in several departments, just because gas has gone up.”
To make an early purchase of the village’s salt supply for next winter after using up all the money in this year’s salt account and Hobart having to deal with heavy snow events at the end of last winter that depleted the salt supply, Kramer said the village will be able to allocate $22,800 into that account to make that early buy from the state.
“We can do it with the general fund,” he said.
Kramer said the amended general fund budget shows total expenditures equaling revenues with the contingency fund increased by more than $77,000.
“We went into this year hoping to have a contingency of about $109,000 for unexpected expenses,” he said. “That number has grown to just under $187,000. That is what you would call your projected surplus, excess.”
From a budgetary standpoint, Kramer said if the amount in the contingency fund grows in the middle of the year when the budgets are amended, “that means you’re in good shape to weather anything that comes the second half of the year.”
“We have a healthy shock absorber system built into the budget,” he said. “We’re not sitting here today telling you we have to make cuts right now to balance our budget. Ideally, you don’t want to spend that contingency – that rolls over and becomes next year’s surplus and builds up our rainy day fund. I’m pleasantly surprised with where we’re sitting financially at the middle of the year.”
As for the village’s two TIDs, Kramer said TID No. 2 will have a surplus of more than $57,000 and bring in about $30,000 more in revenue than projected for this year, while TID No. 1 will show a “book deficit” with expenditures exceeding revenues by around $651,000 for 2019 and tax increment revenue almost $36,000 less than originally projected.
“If you look back at the past couple of years, you had huge surpluses because you borrowed money,” he said. “Well now the projects are being completed, so we’re kicking the money out, but it’s showing up as a one-year snapshot.”