November 27, 2012
In a report released today, the Civic Federation supports the $190.3 million proposed FY2013 Forest Preserve District of Cook County budget for its discipline in identifying non-tax revenue sources as an alternative to increasing the property tax levy. The proposed budget also maintains the District’s substantial reserves. The full 60-page report is available at civicfed.org.
“President Preckwinkle and Superintendent Randall are responding appropriately to the District’s financial constraints by limiting the burden on Cook County taxpayers and maintaining ample reserve funds,” said Laurence Msall, president of the Civic Federation. For the fourth year in a row, the Forest Preserve District is proposing to hold its property tax levy flat at $86.5 million. Additional revenue will be generated through non-tax sources including an increase in user fees for the first time in seven years. The District is also able to draw on funds set aside from prior years because of careful adherence to its own fund balance policy. The current fund balance level is healthy enough that the District should consider adding a maximum target to its fund balance policy to prevent the excessive accumulation of resources that could impact intergenerational equity.
While the District’s overall budget demonstrates continued fiscal discipline and accountability, the analysis includes concerns about the District’s 2012 bond issuance. In June 2012 the Board of Commissioners approved new borrowing for the District before releasing a budget document or updated capital improvement plan (CIP) to give a detailed explanation of the intended use for the new bond proceeds. These actions denied the public full information on how millions of taxpayer dollars will be budgeted and spent. Before making financing decisions of this magnitude, the District should provide taxpayers with an updated CIP or comprehensive spending plan with clear information as to how funding sources and priorities are developed.
Several negative trends threaten the District’s long-term fiscal health. The funded ratio of the District’s pension fund is now below a financially sustainable level, falling from 81.6% in FY2002 to 61.6% in FY2011. The enormous pension challenges facing many other Illinois governments should serve as a warning of how quickly a negative trend can turn into a crisis. As a first step to achieving sustainable pension reforms, the Civic Federation urges District Commissioners, who are also Cook County Commissioners, to establish a pension committee like the one created to seek solutions to the County’s pension crisis.
The full analysis also emphasizes the continued inadequacy of the Forest Preserve District’s governing structure. This structure, where the District and County are governed by the same Board of Commissioners, results in an unavoidable conflict of interest between the County’s mission to provide economic development and the Forest Preserve District’s mission to conserve land. The Federation first addressed this issue in a 2008 report and continues to urge the creation of a separately-elected, unpaid Forest Preserve Board to provide the necessary governance and oversight for operating one of the nation’s largest forest preserve districts.