The state of city finances and the ongoing debate over affordable housing were the dominant issues of discussion at Tuesday night's Town Hall Meeting hosted by the members of the Lake Forest City Council to a packed house at Gorton Community Center.

Projected revenue in the city's general fund balance for the upcoming fiscal year, beginning in April 2011, is expected to just about break even with its operating expenses, according to David Grumhau, First Ward alderman and finance committee chairperson. 

"The overall message is it has been very difficult, but we are coping," he explained.

However, projections for future fiscal years show Lake Forest operating more increasingly in deficit mode. "Fiscal year 2012 and beyond is looking problematic," he said.

Pensions, Medical Costs Drag on City Budget

The struggling economy, and decreased revenue as a result of falling home values are partially to blame for the financial strain, but according to Grumhaus and the rest of the city council, are not the main culprit.

"Pension and medical costs continue to be a large albatross around our necks," Grumhaus said.

Pensions for city workers including police and fire personnel make up 11 percent of Lake Forest's budget.

"We are working hard to stay ahead of the economy, but the state is making it very difficult," Grumhaus told residents, explaining that in future years, the city will likely have to borrow funds, as it continues to pay down its existing debt.

"It seems that the 800-pound gorilla in the room is the pension issue," said resident Colin Sylvester, who suggested moving city employees over to a 401K system used to help privately employed citizens prepare for retirement.

Mayor James Cowhey explained that just like every other community in the state, they have no control over pensions for public employees. "They (the state government) vote on it, and they tell us how it's supposed to be acted on," he said.

Affordable Housing Remains Divisive Issue

The issue over the state mandated pensions prompted Lake Forest resident Aimee Messner to question the city's plans to donate land to the state for the proposed Settler's Green affordable housing development.

"We're about to get back into bed with the state with affordable housing," she said.

As part of the meeting, Lake Forest's plan to bring more affordable housing to the city was presented to residents by Third Ward Alderman Tom Morsch.

"We need to make sure we look at all sources to fund affordable housing in our community," he told Messner. "We're still committed to finding those options."

Morsch gave an update on the most recent city council actions regarding affordable housing in Lake Forest, which included not accepting the plans for the Settler's Green project in its present form, and looking for developing the property that achieves the city's ultimate affordable housing goals.

Other approaches to achieve more affordable housing in Lake Forest include retaining existing affordable units, identifying mixed projects that offer both affordable and market rate homes, looking at development of new affordable units, and exploring joint projects with employers.

What About Revenues?

However, concern was voiced over how long Lake Forest is going to be able to continue funding pensions and other state mandates that it cannot afford.

"Why don't you try and revitalize the downtown area to get the right kind of merchants so we can spend our money there," said resident Ken Radtke.

Resident Gary Brossman bluntly asked the question of how long Lake Forest can sustain itself in today's current conditions.

"How long can the town survive before we're going to reach critical mass and finances collapse on themselves?" he asked.

Leaders assured residents that the city has always been conservative with its spending.

"I don't think people should walk out of here saying we're in dire shape, because we're not," Grumhaus said. "The goal is to cut expenses and to maintain a high level of services."