Tonight’s Park Ridge City Council Committee-of-the-Whole (“COW”) meeting has one very significant item on its agenda: the report on the City’s 2010-11 audit.

Most notable for you legitimate fiscal conservatives in the crowd is that the report confirms what had been rumored for the past few months: that after three straight years of deficits totaling approximately $6 million, the City actually posted a $2 million surplus for fiscal year 2010-11!  And that even includes a $35,000 surplus in the General Fund, the City’s principal operating fund which had posted a $3.7 million deficit during FY 2009-10.

According to the summary of revenues and expenditures for all City funds, although revenues came in at almost $2.3 million less than budgeted, expenses were almost $4 million less than budgeted – and almost $1 million less than in FY 2009-10.  User charges increased by over $1.4 million from last year, which we believe is a positive sign that the City is starting to implement a more aggressive (and more fair) pay-as-you-go approach to the cost of service provision.

As noted at Page 8 of the full 171-page Audit, that’s the second straight year of expense decreases, which the auditors attributed to “the City respond[ing] to the downturn in the economy by prioritizing expenditures related to the core government services”– which just happens to correspond to Mayor Dave Schmidt’s first two years in office and his first two budget vetoes, which in each instance caused the Council to re-visit and reduce its spending.

That’s right, all you big government spendthrifts who might not believe what you just read: “Prioritizing expenditures related to the core government services.”   With special emphasis on “prioritizing” and “core government services.”

The importance of that concept becomes more apparent when considering some of the other information contained in the full audit, such as that the City’s median household income being a shade over $88,000 (or not that much more than our back-of-the-envelope calculation for the median individual income for District 64 teachers); that the City’s unemployment rate increased from 7.0% in 2010 to 8.2% as of August 2011; and that residential property represents over 85% of the assessed valuation of all property located within the City limits.

In other words, homeowners rather than businesses carry the lion’s share of the City’s (and the school districts’, and the Park District’s) property tax demands, with a significant number of those homeowners now battling unemployment (and even more, presumably, battling under-employment).     

Unfortunately, that’s not the only ominous news contained in the audit.

The City continues to carry almost $40 million in debt, of which over $27 million is directly attributable to the general obligation bonds issued in April 2005 and June 2006 to finance the TIF/Uptown Redevelopment project.  As noted by the auditors: “The Uptown TIF continues to put pressure on the General Fund, as the property tax receipts are not sufficient to pay the annual debt service payments” – which debt service payments (according to the audit) will not even begin to pay down principal until December 2012.

For that situation, Park Ridge taxpayers can thank the elected public officials who made it possible: then-mayors Mike Marous and Howard Frimark; and then-aldermen Mike Tinaglia, Don Crampton and Kirk Machon (1st); Rich DiPietro, John Benka and Jeannie Markech (2nd); Sue Bell, Andrea Bateman and Kim Jones (3rd); Sue Beaumont, Jim Radermacher and Jim Allegretti (4th); Dawn Disher, Mark Anderson and Joe Baldi (5th); Frank DePaul, Rex Parker and Mary Ryan (6th); and Larry Friel, Jeff Cox and Frank Wsol (7th) – at least 17 of whom were one-term (or one-half term) wonders, 15 of whom chose not even to run for re-election.

It also should be noted that the surplus resulted in part by a decrease in capital expenditures of over $1.5 million from FY 2009-10.  Our concern with that number is whether it represents a reduction or deferral of necessary infrastructure maintenance, repair and/or replacement, thereby creating a kick-the-can-down-the-road situation that may cause bigger problems – and bigger expenditures – at a later date.

We do know that tree trimming expenditures were significantly reduced in 2010-11, thereby increasing our exposure to power outages resulting from falling limbs that might otherwise have been preemptively removed by the City’s previously customary tree-trimming program – and, according to the City Forester, at only a fraction of the cost of removing those fallen limbs after the fact.

Which means that City government, although having made significant strides toward fiscal responsibility, still needs to do more both in cutting non-core expenses and in creatively generating revenues in ways that don’t unduly penalize property ownership.  That should be the central focus of the upcoming 2012-13 budget process which, in our opinion, can’t start too soon given the size of the task and the reluctance already displayed by a majority of the “new” aldermen to make tough economic choices, much like the aldermen they replaced.

But for the time being, we’ll consider these audit results as the glass being at least half-full, thanks in no small measure to a mayor who has walked his talk.

UPDATE (11.29.11):  An alert reader has pointed out that the Management, Discussion and Analysis section of the audit (pages 3-14) – from which we took some of the information for this post – is the work product of City Staff (i.e., City “management”) rather than of the auditors.  The Staff, therefore, should be credited with the assembly and organization of that information.  

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