A few bright spots dot Palatine's bleak 2011 budget

In the midst of Palatine's bleak $101.1 million 2011 budget the proposed spending plan calls for layoffs, a new utility tax, a higher water rate and increased levy are a handful of bright spots.

The biggest among them is the tax increment financing district within the village's Rand and Dundee roads corridor. Economic development in the area and past accelerated debt payments by the village has left the TIF district with a $4 million surplus that's now being doled out to about 15 area taxing bodies.

“Not only does it help us, but it helps every other taxing body and every resident throughout all of Palatine,” Councilman Scott Lamerand said.

It's the second consecutive year Palatine declared a surplus in the district. The village's share this year is $524,000, while the two largest recipients Palatine Township Elementary District 15 and Palatine-Schaumburg Township High School District 211 will receive more than $1 million apiece.

TIF districts capture additional property tax revenue as the value of property within its borders increases. The money then is used to encourage development instead of going to taxing bodies. Retiring the district's bond issue eight years early saved $6.3 million in interest payments.

The proposed budget, which will be adopted Dec. 13, also marks the eighth consecutive year the general fund will end within or above targeted savings range. The reserve fund in 2011 is projected to be $18.2 million.

Village Manager Reid Ottesen said the healthy reserve fund, combined with the village's conservative approach to finance, places Palatine in high stature with the financial rating agencies.

As a result, Moody's upgraded Palatine's bond rating this past year and Standard & Poor's maintained its rating. Higher bond ratings mean lower interest payments when the village borrows money.

Other bright spots include an 8.4 percent increase in building permits, many of which are for smaller projects but show signs of growth all the same. Revenue from building permits is expected to grow by nearly $54,000.

Palatine is completing its third straight year as a self-insured organization for liability insurance, saving it about $1.6 million over that period. Its health insurance costs are flat from 2010.

Its assessment payments to the Northwest Central Dispatch Agency also will drop by $82,000 due to new members joining the group.