(Mayor Dave Schmidt authored the following “white paper” on his opposition to what he has termed the “Wsol/Bach plan” for using as much as $400,000 of City of Park Ridge tax dollars to provide rebates of up to $2,500 each to residents who have installed or will install flood control devices in their homes.)

The City of Park Ridge is at a financial crossroads, faced with the decision of whether to continue down the current path of irresponsible budget deficits and asset depletion, or to chart a new course of sane, fiscally-responsible budgeting and spending.

In his 2009-10 budget message, City Manager James Hock warned that the City’s cash solvency and its ability to maintain the present level of services was “a concern,” in large part because of a damaging string of four consecutive budget deficits totaling in excess of $10 million, with another $1.9 million deficit already being projected for 2010-11. 

What has that done to the City’s overall financial health?  It has drained the City’s financial reserves – our “savings account” – which protects us from significant losses of revenue and unexpected major expenses.  In April 2006, the City had a $15 million reserve balance.  That reserve fund has dwindled to $8.4 million in just three short years!  This is roughly 16%, or less than one-half, of the minimum 33% of annual operating expenses that sound municipal government principles and our City’s stated policy proscribes for its reserves.  Worse yet, more than 75% of that amount, $6.4 million, is not even from regular periodic revenue sources, but is due to a one-time sale of City-owned land.

In a nutshell, if the City continues to run budget deficits at close to the same rate it has over the past few years, the City will exhaust its reserves in a very short time.  Or put a different way, the City of Park Ridge is headed toward economic disaster unless we drastically change our budgeting and spending habits.

Against that backdrop of disturbing economic reality, Alderman Frank Wsol of the Seventh Ward and Alderman Don Bach of the Third Ward are promoting their plan for offering cash rebates up to $2,500 to residents who have already installed or plan to install certain types of flood control devices.  Alderman Wsol’s own estimate is that the cost of such a program will be over $400,000 during the first year alone, although City Staff calculates that figure to be much higher even without including the cost of Staff time and money to administer such a plan.

Based on information already available to us, there appears to be little doubt that installing “private” flood control devices in individual homes improves the flooding situation for the individuals who install such devices.  They do not, however, improve the flooding situation of our community as a whole, or of any other individual residents.  To the contrary, they actually may contribute to an incremental increase in the flooding experienced by other residents.   The bitter irony of such a plan, therefore, is that a resident who cannot afford the first 75% of the cost of the private flood control device he would be required to pay in order to receive a rebate under the Wsol/Bach proposal would end up seeing his taxes used to subsidize a neighbor’s device that might actually make the resident’s flooding worse!

The Wsol/Bach plan, as currently structured, would also be unfair to many individuals who installed private flood control devices in their homes prior to the completely arbitrary January 1, 2008 retroactive start date for when rebates would be available.  Similar unfairness would occur even if the rebates were only prospective, beginning from the time the rebate program is adopted.

I believe that the City Council has absolutely no business even entertaining such a drain on the City’s precarious finances for a program which provides what amounts to public welfare, a principally “private” benefit to only a small group of property owners.  This program is no less ill-conceived than Alderman Wsol’s plan (endorsed by Alderman Bach) to spend $16.5 million on a new police station which was soundly, and rightfully, rejected by over 80% of the votes cast in the April 2009 referendum.  And it deserves the same fate.

Alderman Wsol and Alderman Bach have already vigorously opposed passing on the full cost of water usage to the people who actually use the most water.  That decision took another $400,000 slice out of the City’s reserves at a time when we continue to bleed red ink.  Now they want to cut deeper into the bleeding wound by slicing an even bigger piece out what is left.

If this were not bad enough for the majority of residents, the cost of the Wsol/Bach plan will also be borne on the backs of the non-union City staff members whose wages have been frozen, and the firemen who have agreed to help this City overcome its financial crisis by effectively sacrificing pay raises to which they were contractually entitled, and the policeman who will soon vote on whether to do the same.  And it is grossly unfair to the four public works employees who just lost their jobs due to the City’s budget woes.

The proponents of this plan claim that the public is clamoring for its implementation.  Claims like that are easy to make because they are so hard to disprove.  Nevertheless, I call upon those residents who oppose reckless spending and who care about returning this City to sound economic health to contact their aldermen and let them know how you feel about the Wsol/Bach rebate plan, and about the City’s deficit spending and overall financial condition.

And I encourage those same residents to attend the upcoming meetings when this proposal will be debated and voted upon.

I am fully committed to doing whatever it takes to return this City to sound financial health.   Anything less would be a dereliction of my duty to safeguard the well-being of City and all of its residents.