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  • David A.F. Sweet

Crafting a Budget Takes Time -- But Results in Lake Forest Have Been Heartening

By David A. F. Sweet

What does it take to craft a $121 million budget? Dozens of meetings, a host of workshops, plenty of debate – all over seven months, leaving little time before the process starts again for the next fiscal year. Welcome to the world of the Finance Department at the City of Lake Forest. Team members’ dedication to working on the budget across all four seasons makes sense, given it’s hard to think of a process that has a bigger effect on the daily lives of Lake Foresters, whether it involves garbage collection, the quality of road surfaces, maintenance in parks and more.

Some members of the finance team -- Mark Krygeris, Diane Hall, Claudia Austin, Sara Hartnett, Mara Joseph and Jamese Scott -- gather in the Municipal Services Building.

“It is safe to say that the budget process impacts all residents of Lake Forest, given that it encompasses both the revenue and expenditure side of all services provided by the City,”  said Elizabeth Holleb, Finance Director for the City of Lake Forest.

 

Although the Finance Department is responsible for administering the budget development process with guidance from the City Manager, it is a City-wide effort, and staff in all operating departments are engaged and involved in all aspects of the process, which begins each September. After Labor Day, the Finance Department starts to develop the five-year Capital Improvement Program. Revenue projections take place later in the fall, and once those are completed, each department is given a target budget amount based upon forecasted revenues. The operating budget is discussed from January to March. During this entire process, the City Council Finance Committee holds meetings to review budget components, and a capital budget workshop and an operating budget workshop are held to gather and exchange information.

 

In the spring, the City Council adopts the annual budget, which must be balanced according to state law and City policy, typically at its second meeting in April. The fiscal year begins each May 1. 

 

The reliable, prudent process is a big reason why the City maintains an Aaa bond rating. And others outside of town have noticed the City’s budgeting prowess: the Government Finance Officers Association honored Lake Forest with a Triple Crown Award in 2021. Out of about 85,000 units of government in the United States, fewer than 350 achieved the distinction. 

 

“The City Council has a longstanding tradition of conservative budgeting, which reduces the likelihood of mid-year revenue shortfalls that might require budget cuts or could impact service,” said Holleb, adding that in most years, this philosophy has resulted in a year-end operating surplus, which the City Council directs to a high-priority initiative. 

 

The biggest chunk of revenue generated for the budget typically comes from property taxes, which is expected to bring in $40 million this fiscal year, or around 34 percent of the entire budget. The biggest expense? Capital outlays, which comprise about 27 percent of spending in fiscal year 2024, or $33.2 million. These outlays often involve large-scale projects, such as the recently completed Burr Oak Area Storm Improvement Project and the upcoming Waukegan Road and Everett Road Intersection Improvements. The City received grants for both projects – $2.75 million for Burr Oak and $3.1 million for Waukegan and Everett – to lower local costs (from 2018-2022, the City secured $17.5 million in grants to save taxpayers money). 

 

The good news for residents who want to know how tax dollars are being spent is that, over the years, the City has offered ways to discover budget information in an accessible format. The condensed Popular Annual Financial Report is intended to avoid the confusion that a 200-page document may generate. It looks back at how the City performed financially for a completed fiscal year and is based on independently audited financial data. The Budget in Brief provides important information and is forward looking, displaying the budget or plan for revenues and expenses for the upcoming fiscal year. This year, the City launched the Monthly Flash Report so citizens can see how the City is trending compared to the present budget.  

 

In addition to those tools, important financial details can be found on the City of Lake Forest website. Users can access property tax data and information on pension obligations. Residents can even explore the City’s financial data with drill-down capabilities to the individual account level. An online check register is available, allowing users to view every single vendor check payment made by the City with check date, amount, vendor name and description. 

 

Since she joined the city in 2012, Holleb has witnessed a number of large changes to budget revenue and expenses. A modified strategy to meet police and fire pension obligations, increases in capital budget needs to maintain all asset categories and continued pressure to balance the budget due to personnel cost increases outpacing revenue growth are the chief ones. She noted the City weathered the COVID pandemic extremely well, as temporary increases in both real estate transfer tax revenue and income tax distributions helped weather budget concerns. On the expense side, though, the City continues to face significant challenges with supply-chain issues impacting purchases and capital project bids coming in significantly over budget estimates. 

 

Holleb has been working in municipal finance for 35 years.  She appreciates how technological enhancements have made the budget process more efficient. 

 

“When I started in Lake Forest, operating departments were still developing their budget submittals in Excel,” she said. “A financial system conversion about five years ago allowed us to move to a much more automated budget development process that has been well received.” She noted that artificial intelligence has not yet impacted the City’s budget process but is on the horizon. Holleb continues to enjoy the process every year.  


“I always learn something, and every budget is different,” she said. “It requires us all to think strategically and creatively to ensure that we are using taxpayer money in the most effective and efficient manner.” 

If you want to dig deeper into the budget, find the following at cityoflakeforest.com/BudgetReports

• Annual Budget Fiscal Year 2024 


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