In last Monday’s post we wrote about the City of Park Ridge’s 2010-11 audit results, which show that the City booked a $2 million surplus in FY 2010-11 – in large part, we would argue, due to the very public budget-cutting insistence (and spending vetoes) of Mayor Dave Schmidt – after 3 straight years of deficits totaling approximately $6 million, and 8 annual deficits over the previous 9 years.
We referred to that surplus as the glass being half full, however, because the City’s finances remain in clear and present danger of plunging back into the red ink barrel – as demonstrated by the City’s projections for the six months remaining in current FY 2011-12 which indicate that the General Fund (the City’s principal operating fund) is facing a $166,000 deficit as part of a projected all-funds deficit of $809,566.
And that’s despite annual property tax increases averaging approximately 3.5% which helped the City pull in $800,000+ more in property tax revenue in FY 2010-11 than during FY 2009-10, even as the Equalized Assessed Value (“EAV”) of the City’s taxable property declined by $100 million – from a shade over $2 billion down to $1.89 billion.
That $166,000 current operating deficit actually is more troubling to us than the $809,566 all-funds deficit, if only because the latter can be explained as the product of yet another projected deficit in the Uptown TIF Fund, this time to the tune of $932,000. By our count, that puts the TIF Fund’s tab owed to the General Fund at around $7 million. And counting.
Worse yet, we understand that the City hasn’t even begun to pay down any principal for the roughly $27 million in general obligation bonds the City issued in 2005 and 2006 to help former mayors Ron Wietecha, Mike Marous and Howard Frimark – along with the herd of aldermen who served between 2003 and 2007 – achieve their “vision” of turning Park Ridge’s Uptown into a knock-off of downtown Des Plaines, Mount Prospect, Arlington Heights, et al., presumably on the theory that substantially increasing residential density in the central business district will create vibrant and thriving retail.
Is Uptown retail vibrant and thriving enough for you?
We expect somebody to accuse us of being anti-development, but we’re not – even despite this cookie-cutter approach to suburban planning and redevelopment. Our principal beef is with the foolish way such projects are financed – which for many/most Illinois TIFs means sticking the taxpayers with the long-term debt and expenses while the often well-connected private developers (like Uptown’s PRC Partners) grab their profits off the top and take off.
We have no idea if or when the Uptown TIF will ever be profitable enough to reimburse the City’s General Fund and pay off all those bonds. Wietecha left town, neither Marous nor Frimark have offered their latest views on the financial hole they helped dig, and Ald. Rich DiPietro (2nd) is the sole remaining member of the aldermanic herd that provided those mayors with their “Amen!” choruses on cue.
Accountability tends not to be embraced by spendthrift public officials once they’ve left office, especially if they did their best to dodge it even while in office.
But that means the current mayor and City Council, along with City staff, will just have to hunker down and do the heavy lifting necessary to soundly manage the City’s finances with that TIF albatross hanging around their collective necks for the foreseeable future.
Starting with finding a way to eliminate that projected $166,000 year-end deficit.
6 comments so far
You can look at a glass and see half full, or you can see it as half empty; but you should really see the glass as being twice the size that it needs to be.
EDITOR’S NOTE: If that’s intended as a criticism of “big” government, we tend to agree. BUT that needs to be demonstrated by analyzing what City government is now doing that it shouldn’t be doing; or that it should be doing to a significantly lesser degree. Simply complainging about “big government” may be fashionable in some quarters, but cutting it’s size is another story – and, in our opinion, that can be best done, at least at the local level, with a chef’s knife instead of an axe.
Thanks for your continued diligence on the topic of the public fisc.
You’ve mentioned a couple of times that Uptown’s parents were 2 or 3 mayors and its midwives were a “herd of aldermen.” Well said.
There have been numerous reader comments over the past couple of years to the effect of “Well, cutting city council in half was supposed to save money, but look what a mess we are in.” If I may, many of those comments are meant to criticize Frimark as much as anything else.
I have no brief for Frimark. I voted for him over Tinaglia but then switched to Schmidt. I really wasn’t sure about reducing the number of aldermen at the time. All I knew is that neither of mine seemed very responsive.
I’ve now come to the conclusion that having one alderman per ward increases accountability. There’s no doubt as to how a ward is represented. There’s no “herd” in which an alderman can lose herself. Your vote shows where you stand. The voters know what they’re getting.
The current group of seven, plus the mayor, have an historic opportunity to put Park Ridge on the right course. You’re right that we have a glass half full/glass half empty situation. Maybe they can fix that.
EDITOR’S NOTE: We’re not sure we entirely agree with your “size doesn’t matter” argument, FWT, but you do make some sound points.
As for this Council fixing all the stuff previous ones botched or ignored, we share your hope.
Thanks again for keeping a focus on these financial matters. The Advocate writer reported the projected all-funds deficit but did not explain it, probably becuase she did not understand it or maybe wanted to protect Uptown.
EDITOR’S NOTE: We chalk that up to the H-A writer’s not liking Mayor Schmidt, which would explain why her recent story “Six-month Park Ridge budget forecast shows $800K deficit” made no mention whatsoever of the recently-reported $2 million surplus for FY 2010-11.
But to be fair, she did write that the projected $809,500 2011-12 all-funds deficit was “largely due to the city’s struggling Uptown Tax Increment Financing District.” Actually, it was entirely due to the TIF, but at least the H-A reporter was in the right ballpark.
5th Ward…
Accountability is good but some of these guys need to be asked, who are you accountable to? One might be surprised at a couple of responses. Sweeney seems. Way more interested in serving the Public Safety staff and staff in general than he does the first ward residents. And the Bernick goof seems like he wants to be Hocks personal valet. In the face of some horrid performance by Hock or staff who Hock seems not to oversee Bernick is always there at Hock’s defense. What gives?
EDITOR’S NOTE: Good question.
Suddenly, Tom Carey looks like a great Sixth Ward aldermen by comparison. Who would have thought?
EDITOR’S NOTE: We’re not sure out of what field your observation comes, but we don’t disagree generally.
@Anon 12.06.11 9:16 pm:
It is a good question indeed. My observation is that aldermen past and present respond to what’s in front of them. If it’s a briefing from the city staff or from whoever the mayor is, or whoever is testifying at a council meeting, that’s what they know. Rarely do they show the curiosity of inclination to ask what the residents think unless the residents get in front of them.
If one resident speaks up, they listen a little. If a lot of residents speak up, they listen harder. We shouldn’t have to show up en masse just to get our viewpoint considered, but that appears to be the reality, at least in the august chambers at 505 Butler Place.
EDITOR’S NOTE: We’ve observed the same thing you have, FWT, and it’s sad that so many of our elected officials seem to govern by reacting to squeaky wheels rather than pro-actively based on some understandable political philosophy. Other than Ald. Knight’s demonstrated pursuit of fiscal responsibility and Ald. Sweeney’s infatuation with public safety, we have no real idea what floats the other aldermen’s boats.
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