Lake Forest council adopts comprehensive fiscal plan for FY2025

Lake Forest's City Council on April 15 approved the city's comprehensive fiscal plan for fiscal year 2025, a multi-part document that combines the operating budget, five-year capital improvement plan and fiscal policy guidance.

Director Hohleb summarized the document as more than an annual budget, noting it includes revenue and expense projections, long-term forecasting and a five-year capital improvement plan. She said citywide FY25 revenues are projected at $116.8 million with expenses of $115.7 million and that the general fund is projected at just under $43 million in revenue and $42.8 million in expenses.

Hohleb said two revenue categories'building permit fees and interest income'are coming in significantly over budget for FY24 and that staff proposed transferring $3,780,000 from the general fund to the capital fund to invest in the city's capital program while maintaining a general fund reserve policy targeting 70% of general fund revenues.

Aldermen asked about the rationale for a 70% reserve target; Hohleb said the reserve supports the city's bond rating and insulates the city from state budget impacts. She also said the governor's proposed elimination of the 1% grocery tax would reduce city revenue by about $525,000 annually if enacted, and that the state had indicated it might authorize local governments to impose their own grocery tax to offset the loss.

Mayor Tack called for a motion to approve the comprehensive fiscal plan; after a motion and second, the council adopted the plan by roll call, 8-0.

The council's approval authorizes staff to proceed under the plan; staff said they will return to the finance committee in July with final fiscal-year-end actuals and to consider transfers based on year-end results.

The most immediate fiscal action referenced in the presentation is using positive FY24 variances to transfer $3.78 million to the capital fund, subject to year-end close-out and finance committee review.