Heading into Budget Season, Lemont Faces Reality of Unstable Housing Market, State Finances

In this decade, Lemont’s golden years were 2005-2006.

During that period, housing starts, revenue, construction, business and home-buying were brisk. By 2009, however, those activities had hit a startling low point.

Lemont is in the grips of the same economic vise as the rest of the nation, and the state of Illinois isn’t helping any, according to an overview of the village’s finances presented at the Village Board's committee of the whole meeting Monday night.

Village Administrator Ben Wehmeier and Assistant Village Administrator George Schafer used charts, graphs and commentary to give officials a historical perspective and current numbers as the village prepares to hammer out a budget for fiscal year 2011-2012.   

The village’s revenue from property taxes will increase slightly in the next fiscal year. But Schafer noted, “No money is moving around and no one is moving into town.”

In fact, Lemont's population came in at 16,000 when the 2010 U.S. Census results . The total was lower than village officials expected, especially since a special census in 2007 measured Lemont's population at 16,625.

“Who we have here is what we have," Schafer said. "Many people are ready to move and start a family, but they can’t sell their condos. That is the population we would be looking at to move here."

In 2004, Lemont received 218 requests for building permits for new single-family homes, officials said. Fifteen permits were issued in 2009, while 36 permits were requested last year. 

According to the report, more than 300,000 building permits were issued in the Chicago metropolitan area in 2005. In 2010, 3,000 permits were requested.

Nationally, the median sales price of existing homes dropped to rock-bottom in 2009.  The current value of a home in the Chicago area is the same as it was in 2002, according to data compiled by Tracy Cross and Associates, a consulting firm in the residential real estate industry.

One out of 9 homeowners in Illinois currently owes more on their mortgages than their homes are worth, Schafer said.

The foreclosure rate in Illinois is the ninth highest in the nation. About 100 homes are in foreclosure in Lemont, which figures to 2 percent of the village’s housing stock.

Experts say the recession is over, but until jobs come back, the healthier economic activity seen in  2006 won’t return until 2014, Schafer said. Officials pointed to the number of jobs lost in just the building industry.

Lemont and all Illinois municipalities  are also being tied down by the state’s precarious financial situation and its failure to pay  bills on time, Schafer said.  

“What we have to deal with is the state," he said. "People are taking notice. Every time Lemont goes out for a bond issue, Illinois comes up. If you get 25 percent of your income from state income tax, [the bond agencies] hold that against you."

In another matter, Wehmeier explained why the village should switch its budget process from the current  appropriation method to a budget system. Wehmeier said the budget method is a more modern approach that better reflects  the village’s actual revenue and expenditures.

“It makes us look better when we are going out for bonds," Mayor Brian Reaves added.

Because the village doesn’t have adequate funding, several capital improvement projects will have to wait, officials said. were discussed Monday, including a red light camera and a change in vehicle sticker purchases. Neither of these ideas will be included in the new budget, officials said.

Budget discussions begin in March. The budget will be approved in April for the May 1 start of the 2011-2012 fiscal year.