- Nov 21, 2020
Early Retirements for Top Staff Included in Cost-Saving Strategies
Recognizing the harsh impact of the pandemic on local residents and businesses, the Northbrook Board of Trustees endorsed a proposed 2020 property tax levy that is essentially unchanged from the previous year. The total Village portion of the tax levy would be $21,865,790, a reduction of approximately $17,000 compared to 2019. The challenge for the Village will be how to cut costs given the dramatic fall in sales taxes and other sources caused by the pandemic.
The Village has taken action on a number of fronts to reduce expenses, including:
Early Retirement Packages: Twenty-one long term staff members are expected to retire in the coming months, including Village Manager Rich Nahrstadt, Department of Planning and Development Director Tom Poupard, Deputy Village Manager/Chief Financial Officer Jeff Rowitz, and Police Chief Roger Adkins. Although most positions will be refilled, the overall salary savings is estimated to be approximately $2M over the next five years.
Suspension of Excess Pension Fund Contributions: For the last few cycles, the Village has contributed more than the legally required amount to the Police and Fire Pension Funds, partly to secure the Village’s continued AAA bond rating. Given the unique circumstances of the pandemic, the Village will reduce its contribution by around $1M next year, making the Village’s contribution equal to the amount required by state law.
Long-Range Planning: Staff is prioritizing necessary projects with an eye toward spreading costs over time and reducing 2021 expenses. For example, the Capital Improvement Plan discussed in November forecasts spending around $3M on improvements to the downtown area over a five-year period, but only around $174,000 of that will take place in the next fiscal year. The Trustees also directed staff to look at alternative sources of funds, including possible grants and public/private partnerships. Village Manager Nahrstadt stressed to the Board that the financial picture is fluid, and that projects recommended in the draft CIP might be taken out later in the budget planning process.
The recommended tax levy discussed in November will be presented for approval at the December 8 regular Board meeting, in accordance with state requirements. The Village’s budget planning process will pick up in February. Although adjustments will likely need to be made to reflect changing circumstances, the property tax levy cannot be increased above the amount approved in December.
“I think it’s a big statement to our residents that across the board, we’re trying to spread the challenges,” said Trustee Kathryn Ciesla at the November 10 meeting. “We don’t want to take more money out of villagers’ pockets at a tough time so we’re holding back, we’re cutting, we’re doing everything we can to be as lean as we can and as conservative as we can.”