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Village's $44.5 Million Budget Back to Drawing Board

Residents, trustees question $500,000 transfer from water and sewer fund, hotel tax funding fireworks and use of non-home rule sales tax revenues.

The expected approval of the $44.5 million budget ordinance for the 2011-2012 fiscal year was  postponed during Monday night's village board meeting due to concerns and questions raised by residents and trustees.

A major point of contention was a transfer of $500,000 from the water and sewer fund to the general fund. In the proposed budget, an increase of 40 percent for water and sewer rates will hit residents and businesses within the year.   

“If we don’t divert the $500,000 to the general fund, could that lessen the impact on water and sewer rates?” Rich Sustich, trustee asked.

“We are not going to be able to create any other revenues than what you see in the budget,” said Bob Vitas, village administrator.  “Changes in current fund transfers will cause reductions in services.”

“The budget will be short that amount (if the transfer is not made), so the board will have to decide what services will be cut to reflect that shortfall,” said Al Zochowski, finance director.

During the public hearing portion of the board meeting, a resident voiced strong opposition to transferring any revenues from the  fund.

“Money has already been taken out of the fund," said Jim Tarbet, resident. "The water and sewer fund is owed $3.8 million dollars if you approve this budget the way it is."

There was additional concern over using the hotel tax to pay for the July 4 fireworks celebration at Paulus Park.

“Revenues from the hotel tax should be used to draw people in to visit Lake Zurich; for uses such as advertising our downtown in the future or promoting the village in other ways,” said Jeff Halen, trustee.   

Halen said using it to pay for an event such as the fireworks is too far away from the funds intended purpose.

How the village is planning to use non-home rule sales tax revenues also was at issue.

“These taxes are for infrastructure only,” Tarbet said. “Not parkway trees, pick-up trucks for public works; maintaining something is not infrastructure.”

“It appears we are not using the non-home rule sales tax revenues for pure infrastructure, it is a gray area,” said Halen.

“When we start using those revenues for other things such as vehicles, how do we guarantee that won’t just continue into the future?” Halen asked.

Halen said while it is permissible, the board and village staff previously discussed that revenues wouldn't be used for any non-infrastructure needs. 

Prior to the board meeting, village staff invited residents to give their input on the budget process and provide any suggestions on how to reduce costs or increase revenues.

Just two residents offered their ideas, and Tarbet was one of them.

“I’m very disheartened about what is within this budget, approximately a month ago a request went out for anyone to bring forth ideas about cuts," said Tarbet. "I submitted three pages of bullet points, with areas to improve efficiency and incur savings,” said Tarbet.

“I got a last minute response with an attitude of ‘why are you telling us how to do our job,’ and very few points were commented on,” Tarbet added.  

“I would ask that we look at how to respond to all of Mr. Tarbet’s suggestions,” said Sustich.

Halen stated additional budget concerns, consisting of strategic priorities not being tied to the budget, no clarity about planned employee raises, as well as the salary of the assistant village administrator and the fact that village employee car allowances were taken away but then added back in to salaries.

Vitas warned that any changes to line items within the budget could have a ripple effect on major village plans.

“Some of the obligations are dictated by contract, others are covered by administrative overhead; changes will affect the strategic and operational management plan, as well as the capital improvement plan,” said Vitas.

The board was polled at the end of the discussion, and not all trustees believed the budget needed a second look.

“The budget, once adopted is a road map, it is not something that absolutely has to be followed,” said Jim Johnson, trustee. “If we find we can save money, we can always not spend and realize some of our board goals while doing that.”

“Because of the time involved, and I don’t want to see a $500,000 shortfall, I am willing to go with the budget as is,” Johnson added.   

The majority of trustees want village staff to understand and rectify concerns and questions before the adoption of the 2011-2012 fiscal year budget, which is tentatively set for the next board meeting on Monday, April 18.

“It would be a great opportunity to address lingering questions, and as a board (we need) to be specific, so we are clear as to the policy decisions,” said Jonathan Sprawka, trustee.

“I think we need to go back to the list, and make sure Mr. Tarbet’s suggestions are responded to adequately,” said Sustich. “I also want an understanding of the implication of not transferring funds from the water and sewer fund.”   

“I would also like to see the general fund impact of removing the $500,000 transfer from water and sewer,” said Sprawka.   

Trustees were directed to e-mail questions and concerns to Vitas by end of business Wednesday. Vitas said he would contact Trustees Dana Rzeznik and Tom Poynton to make them aware of the deadline, since both were absent and excused from the meeting.

Concerns will be addressed and staff could go back and reconstruct the budget to reflect any changes before May 1 when the budget is set to be implemented, said Vitas.  

Approval of the budget is scheduled to occur by the end of the month.

Bill April 06, 2011 at 02:14 AM
(60 ILCS 1/245‑5) Sec. 245‑5. Resolution at township meeting for transfer among township funds. (a) The legal voters of a township at an annual township meeting or at a special township meeting called for that purpose may, by written resolution by a majority vote of the legal voters present and voting on the resolution, transfer from one or more township funds to any other township fund or funds... It appears that the village admin is trying to circumvent this law by calling the $500k "a fee" rather than what it really is -- a transfer.
Vortex April 06, 2011 at 03:26 AM
Ernie, as in any government entity, the purpose of bureaucrats is to expand their power by justifying the need for more bureaucrats under them. When was the last time anyone heard about government downsizing the middle management or "executive" level?
Vortex April 06, 2011 at 03:30 AM
My family and I are more than willing to accept cuts in services from the village. Cut today, cut tomorrow, and keep cutting. Of course, the prescribed playbook is to cut police and fire departments to be as "in your face" as possible, while protecting the administration's sacred fiefdoms and pet projects. Wasn't there a $300K computer overhaul project in the 2011 budget? That can certainly wait a year or longer. And what's with the car allowances? Who gets those these days? Vitas can sit in his office and do his work, and we'll gladly pay him $0.51 per mile if he has to drive across town for a meeting, in accordance with IRS guidelines.
Ernie L. April 06, 2011 at 03:43 AM
Cedar Creek, how true you are about your 1st comments and let me add this to your new comments. not only have they gone ahead with the new computer upgrades but last yr 2 fire depts had new parking lots put in. not seal coated and re-striped mind you but a grinder was brought in and the old blacktop was grounded off , new blacktop laid down and then re-striped. there was absolutlely nothing wrong with the old parking lots. the Village also gave the go ahead to install brand new phones in every building and every office own by the village these phones do everything but cure the sick and they weren't cheap at all.
Truth seeker April 06, 2011 at 08:03 PM
Ernie, I agree with most of your comments but need to correct one. The two fire stations that had new parking lots put in were not paid by LZ residents. They were paid for by residents of the fire protection district(Hawthorns Woods, Kildeer, Deer Park, North Barringtion etc.) The Fire dept. operates 4 stations. The village only owns the one on Buesching Rd. The other three are owned and maintained by the fire district; a separate taxing body. The district pays about 48% of the entire fire budget with the village paying the other 52%. Because of this sharing of resources our actual cost for fire/paramedic service is pretty cheap. How do I know this? Without getting anyone who works for the village in trouble I will only say that I know people who work for the village. I have been reading this and other blogs for a while and finally have decided to post. However, I have been calling the village and in some cases the departments heads themselves for a while. It is amazing what you can learn when you make a phone call. I am going to continue posting on this site; when I am in town; but will also continue to make phone calls to the village to try and learn the truth and I would encourage everyone to do the same.

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