Lake Forest Approves Financial Restructuring Plan to Reach Balanced Budget

city leaders took what they consider to be a big step toward financial stability Tuesday night when they approved a financial restructuring program that will allow the early retirement of more than 20 city workers.

The plan, spearheaded by First Ward Alderman David Grumhaus who also serves as the city council’s finance committee chairman, allows the early retirement through the Illinois Municipal Retirement Fund (IMRF) Early Retirement Program.

Lake Forest will save $345,000 to $775,000 annually, and $5 million over the next 10 years.

“This restructuring provides us with a unique opportunity to dramatically cut our costs, and put us in a position to achieve a balanced budget through at least 2016,” said Grumhaus.

The IMRF Early Retirement Program is opened to the state’s municipal employees who have at least 20 years of service to a city, and are age 50 or over.

It is expected that three of Lake Forest’s major municipal departments - Public Works, Parks and Recreation, and Finance/IT will be re-organized. Additional savings are also expected in other departments.

The positions vacated will be filled through the promotion of other current city department employees.

“We are very confident that this plan will have little impact on city operations, but will increase employee moral as those who have waited in the wings can now move up,” said Grumhaus.

The program will begin implementation in April, and will continue for one full year in order to ensure smooth transition.

Lake Forest, like most municipalities, has struggled with keeping a balanced budget in recent years due to the downturn in the economy and the decrease of Equalized Assessed Valuations (EAV) of homes, which resulted in decreased property tax revenue.

Last fall, Grumhaus informed residents at a Town Hall Meeting at that projected revenue in the city's general fund balance for the upcoming fiscal year, beginning in April 2011, was expected to just about break even with its operating expenses.

The new financial restructuring plan is expected to give the city more breathing room by trimming current staff numbers.

Decreasing city staff is nothing new to Lake Forest, however. Since fiscal year 1992, the amount of city employees per 100 households has decreased from 3.65 to just over 3.1.

By fiscal year 2012, the amount is expected to decrease even further to just over 2.9 city employees per household.

The financial restructuring plan was approved Tuesday first by the city’s finance committee, and later unanimously by the city council.

“We have probably the finest workers in the state to help run this community,” said Lake Forest Mayor James Cowhey, after the plan was passed. “We know those who are going to step up are very anxious to fill these shoes.”