The new, zero-base budgeting approach used this fall while Oak Brook staff and officials planned the 2023 budget fulfilled the goal of bringing better accountability, transparency and efficiency to the process.
“Between Zero-Based Budgeting, department restructuring, and enhanced program scrutiny by both staff and the Village Board, more than $1 million of annual operating expenses were eliminated from the 2023 budget,” Village Manager Greg Summers said. He added that savings is offset by increases in other line items, driven by inflation and other factors.
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“With inflation affecting everyone’s budgets, the task of keeping up without new revenues is monumental and requires constant and ongoing financial scrutiny,” Summers said.
He said that despite extremely conservative revenue estimates, the budget remains balanced, with no new General Fund operating revenues.
“Furthermore, several million dollars of capital investments have been either wholly eliminated or reprioritized with a true five-year capital improvement plan being developed that aligns infrastructure investment with projected revenues, allowing for proper maintenance and improvement of village assets within our existing means,” Summers said.
He said with zero-base budgeting, all village departments were required to provide significant enhanced detail for each of the requested line items.
“After reviewing prior village budgets, it was evident that no detail was provided for each account within a program or fund, and often staff was unclear what fell within each category,” Summers said.
Village Board member Larry Herman said the new process was initially challenging for village department heads, who had not been used to providing so much detail.
“But the money saving process proved productive and identified and corrected past problems such as: some expense items were budgeted in multiple accounts, resulting in over-budgeting for the same item; expense items with no descriptions that was possible budget ‘padding,’ lack of accountability and justification for capital expenditures.”
Herman said the move to zero-base budgeting uncovered many instances of prior unaccounted and unnecessary budget items.
“We also moved from the old manual/paper budgeting system to a new online budgeting system that greatly facilitates the budget process for staff, but also makes the electronic budget accessible to the public,” Herman said. “It was published to the village website and provides far better transparency.”
Herman said many budget items were reclassified to more appropriate classifications than in the past.
He noted, for example, that in the past a large portion of the Public Works department salaries and other expenses were charged to the village’s Infrastructure/Capital Improvements Fund, instead of the General Fund, as is common with other municipalities.
“For 2023, about $2 million of such expense were moved from the Infrastructure Fund to the General Fund, and yet the General Fund 2023 budget is still balanced after absorbing this additional expense,” Herman said. “That frees up the $2 million in the Infrastructure Fund for additional capital improvements over time.”
Longtime Village Board member Michael Manzo said he was very pleased with the results of using zero-base budgeting.
“It’s something we should have done a long time ago, but I’m glad we’re finally doing it, and I’m not surprised at how it worked out,” he said,
Oak Brook is scheduled to hold a hearing on its 2023 budget Tuesday Dec. 13.
Chuck Fieldman is a freelance reporter for Pioneer Press.