Half Full Also Means Half Empty


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.