With the possibility of tax increases and service cuts looming, the Niles Village Board, department heads and residents examined every item in the village’s proposed budget Monday night at a marathon four-hour budget workshop.

At the end, one resident thanked trustees for the transparency of the process, and one trustee noted with appreciation that Niles government officials had never discussed the budget so openly.

For the first time in memory, Niles must cut expenses and raise revenues — partly in the form of increased taxes and fees — because of a shortfall in the budget due to the weak economy.

Initial budget numbers indicated the shortfall would be $4.8 million, said Mayor Robert Callero. Village staff proposed $1.5 million in cuts and $1.3 million in increased revenues to trim it to $2 million, and Callero said the village might use that amount from reserves. Niles’ total budget stands at about $35 million.

Monday’s meeting was intended to discuss the proposed budget, which Village Manager George Van Geem and Finance Director Scott Neukirch had drawn up, and the finance committee and Callero had reviewed.

Callero specified that trustees would discuss the budget and listen to public input, but that no final decisions would be made for about a month. Another public meeting would be scheduled before then, he said. The budget will apply to Fiscal Year 2011, which begins May 1, 2010.

The first dramatic highlight of the meeting came when Marty Friedman, director of Niles Family Services, pointed out that the recession has increased the number of families and individuals in crisis. With the need intensified, Friedman said the proposed 50 percent cut in the agency’s $917,000 budget would leave residents with emergencies unaided.

Other agencies in the area have waiting lists of as much as 18 weeks, which is a long time for a family in crisis, he said. Friedman said the chief of police believes Niles Family Services helps reduce crime, and Trustee Joe LoVerde read from a consultants’ report which concluded, “Niles Family Services helps keep the whole community more stable.”

Linda Feldheim, a social worker at Culver School, said that without Niles Family Services, the village would have more calls to the police and the Department of Children and Family Services and more crime.

“I’m listening to talk about spending money to beautify the streets, and all I can think of is the children and the families,” Feldheim said. “This supports the people of your community — it’s so important.”

Another dramatic moment came when Neukirch discussed the possibility of reducing personnel expenses by $900,000, either with early retirement incentives or layoffs of as many as 12 employees. Trustee Louella Preston suggested during the workshop that the village should conduct an efficiency study of village staff and service delivery. The board discussed the subjects in executive session following the workshop.

Near the end of the meeting, Trustees Jim Hynes, Joe LoVerde and Alan Weel questioned why the village was making draconian cuts while leaving the Niles Free Bus service intact.

Hynes questioned how the village could look people in the eye when cutting $450,000 from Niles Family Services, laying off employees to the tune of $900,000 and raising property taxes $435,000 and yet not questioning the $550,000 cost of the Niles Free Bus.

LoVerde complained that the village does not have reliable ridership figures and does not know how many riders are Niles residents. Both LoVerde and Weel claimed Pace’s estimate of 36,000 riders is likely inflated. LoVerde suggested examining costs to see what could be saved by trimming bus service hours.

Callero countered by saying the village is looking at changing the bus routes, which could save $130,000, and that Pace plans to grant the Arterial Rapid Transit service to Niles largely because of the free bus. Arterial Rapid Transit is express bus service that would run from Niles to the Chicago Transit Authority’s Jefferson Park Blue Line station, where commuters can catch trains downtown or to O’Hare International Airport.

Trustee Andrew Przybylo suggested the village could charge a fare to ride the bus, but Callero said 70 percent of riders are seniors, who are entitled to free transit per state policy, though that may be changed.

A resident commented that she rides the free bus everywhere because she, like many seniors, does not drive and doesn't want to be dependent on anybody else.

Other topics discussed include:

Proposed revenue increases:

• The proposed budget calls for a 2.5 cent per gallon gas tax increase. Niles does not currently impose a gas tax.

•The village's portion of the property tax would be increased by an average of $30 per household.

• Vehicle sticker fees would increase from $25 to $35, and from $10 to $15 for seniors. Trustee Weel suggested raising it to $40 and leaving the senior fee at $10.

• The $200,000 cost of crossing guards could be shifted to school districts. Trustees deliberated on who bears responsibility for crossing guards, and staff will look into what other communities do.

• Liquor license fees could be increased by 25 percent. Upon learning they now run in the $900 range, Trustee LoVerde said he felt the fees should be higher, given how valuable they are to businesses.

• Life Line service fees, which allow elderly and disabled people to push a button for help in emergencies, would be raised.

• Fees for DUI offenders to get their impounded cars back would be $500, which is in line with other suburbs.

Proposed cuts

• The proposed budget reduces Niles Family Services' $917,000 budget by 50 percent.

• The village could cut $900,000 in personnel costs through layoffs, early retirement or other means.

• Excess insurance would be trimmed.

• Winter street salting would be reduced.

• The taxi cab subsidy for seniors would be eliminated.