Riverside's 2010 Budget Workshop meetings ended, yielded sobering results. The RCA majority board cut nothing from the existing budget and instead spent $315,000 of our reserves. Rather than matching money coming in against our expenses and cutting what we can’t afford, they spent our savings just to stay status quo.
Among other things, the board deferred making $290,000 of necessary contributions to our Village Capital Fund. The Village uses the Capital Fund to pay for roads, infrastructure, sidewalk repair, replacement of emergency vehicles, technology maintenance and other necessary maintenance projects throughout the year. Money that should be in the Capital Fund will not be there in the upcoming year, it will instead be used to pay for day to day operations. In addition, the RCA refused to fund $39,000 of known pension obligations, with President Gorman explicitly stating that he was pushing this debt off onto future Boards.
Under this scheme, the board actually spent $644,000 of the undesignated reserves, or basically one-half of the undesignated reserve balance. Not paying bills or not setting aside money for maintenance and pensions does not mean we save money; we eventually have to pay it. The board just added to the $1,400,000 2011 deficit by deferring funding of known expenses. Trustee Sacchi realistically said, “I know this will cost us more latter.” When capital expenditures are deferred they will either carry an interest charge or the actual cost (say of an ambulance) will be greater later. Deferring payments for known expenses only increases the cost of those expenses and we are fooling ourselves if we don't acknowledge that those expenses will cost us more later.
These hearings proved, reinforced, and confirmed the Village has a structural revenue problem that must be addressed head-on, without delay tactics. There are only two ways to solve the problem. One way was to make cuts. The board just finished the 2010 budget hearings and not a single item was cut to address the structural change needed to balance the 2010 Budget, let alone budgets to come. Why? Because there is nothing to cut. Every reasonable attempt has been made to find efficiencies and containing expenses. The RCA now joins the ranks of trustees that recognize there is simply nothing left to cut.
The second solution is to increase revenue. Trustee Sacchi recognizes that a tax hike is “inevitable” to maintain our current level of services. Despite the fact that Sacchi understands that we are in dire need of money, it also appears that Gorman, Shevitz, Sacchi, and Reynolds have no intention to ask for it and plan on using our Village savings to pay for day to day expenses until that savings runs out. The economic picture continues to deteriorate exponentially without an additional revenue source for 2011. The 2010 budget deficit of roughly $1,000,000 was filled by using savings, not by making cuts. Under this plan, we will have COMPLETELY depleted our savings within 3 to 4 years, if not sooner. Spending our entire savings cannot be our fallback; it is dangerous and fiscally irresponsible on all fronts.
Trustees Sells, Sussman and Scully have been warning us for years the day will come when we are simply out of money. In preparing the 2010 budget, former Village manager Robin Weaver stated “there has been a structural deficit for the last five, six years…it was always getting to this.” That day has come.
The board has an obligation to protect Riverside from financial ruin and the window of opportunity is slamming shut. Our RCA majority Village board must find an alternate revenue source and cannot cheat the future of Riverside simply for short term political gain.
Kelly Navarro