New Fiscal Year Budget Remains in Limbo After Trustees Deadlock

For close to two hours at the village board meeting Monday night, trustees brought forth an array of concerns that still remain over the proposed fiscal year 2011-2012 budget.  The resolution to pass the budget ultimately failed with a three-to-three stalemate vote.

The budget is required to be adopted by April 30 according to state law.  Trustees will now re-communicate lingering budget concerns to village administration by April 25, and budget approval will again be considered at the May 2 village board meeting.

“I think the directive from the board at the April 4 meeting (to administration) was to address the questions we had, I asked what it would take to bring back the ambulance we took out of service; it was asked but the answer was not provided,” said Jonathan Sprawka, trustee.

“In terms of putting the ambulance back in service, we know that will take six to eight full-time positions at a cost of over a million dollars,” said Bob Vitas, village administrator.

Concerns about the $500,000 transfer from the water and sewer fund to the general fund are still at the top of the list.  

“What we had hoped to know and did not receive is the negative impact on the general fund if we didn’t make the transfer, the $500,000 is about 2 percent of the general fund and 9 percent of the water and sewer fund,” said Rich Sustich, trustee. “It will have a substantially larger impact on the water and sewer fund.”

“Where else do you go to find $500,000?” Vitas asked. “It first starts with personnel, because that cost makes up a large majority of the budget.”

Vitas provided background and reasons for the fund charges to the board.

“There is a past practice of placing an administrative charge on the fund; technically it is a charge,” Vitas said.

The reason for charging the fund, Vitas explained, is due to the water and sewer fund providing a utility service, similar to other utilities such as the power company.

“We treat those as charges to the fund because village employees do all the accounting, finance and administrative work required to keep it going,”  Vitas said.

During the public comment portion of the meeting, two residents expressed deeper concerns about how the fund has historically been managed.

“(A total of) $1.5 million has been transferred out of the water and sewer fund; we’re replenishing one fund at the expense of another, perpetuating failures of the past and pushing off obligations way beyond tomorrow,” said Bill Leahy, resident.

Leahy said he has identified three transfers of $500,000 from the water and sewer fund to the general fund since 2009.

“The water and sewer fund has been a cash cow for the village; it’s been misused. Thirty percent of the administration’s time is charged off to that fund and it is paying $176,000 in rent,” said Jim Tarbet, resident.

“Kicking the can down the road, stealing money from one place to another is not going to make it; no transfers should be taking place whatsoever,” Tarbet added.

Trustee Jeff Halen said many of his apprehensions over the budget are still unresolved, despite communications from village staff.

“I have issues with the Comcast tax. The money should be dedicated for equipment, but has been used in the general fund for other things, and I still don’t agree with using the hotel/motel tax to pay for the Independence Day celebration fireworks,” Halen commented.

Halen also pointed out that the non-home rule sales tax revenue should be dedicated to infrastructure, but it is in the budget to help cover the cost of village vehicles.  

"I think it comes down to a philosophical difference of opinion," Halen said.

“We are at a place right now where we need to pass the budget or make revisions to the budget,” said Jim Johnson, trustee who sat on the board for his last time due to not seeking re-election.

Vitas said if the budget was not passed by April 30, at midnight on that date, the previous budget would stay in place for  90 days, but prior to the end of the 90 days, a new budget would have to be passed.

“Making payroll, the village’s bond and credit rating may all be affected as well,” said Kelly Cahill, village attorney.

“My concerns are many; they are great. I recognize that not all of them will be addressed, but unless there are significant changes I will be a ‘no’ vote in 30 days,”  Halen said.

“At what time do we start acting on things, instead of just lip service?" Trustee Tom Poynton asked. “We imposed a non-home rule sales tax, and a utility tax, and when it comes up for renewal I don’t think I’ll be supporting it.”

After the continual questions began to linger, Vitas proposed a study be conducted on the water and sewer fund to determine if the village is charging  the appropriate amount for the services it provides.

“What is the value of the services (provided)?” Vitas asked. “I can’t tell you precisely what it is; a cost allocation study will answer the question once and for all.”

“The question (now) is who is going to do it, how much will it cost and how long is the turnaround?” Vitas asked.

“I don’t want to pay a premium to get it done,” Vitas added.

The board voted on the original budget document, which failed by a vote of four to two. Trustees Dana Rzeznik and Johnson approved, and Trustees Halen, Sustich, Poynton and Sprawka voted it down.

A new resolution was created to account for the budget passing, but with a stipulation that in roughly 30 days the board’s questions would be answered and possible changes incorporated into a revised budget.

That motion failed due to a lack of majority with a split down the middle of the board vote.

Rzeznik, Johnson and Poynton voted yes, while nay votes were cast by Halen, Sustich and Sprawka.  Mayor Suzanne Branding was absent and excused from the meeting.

“We can nickel and dime the budget or make hard policy choices, and now is the time to make those choices,” Vitas said.

“If hard decisions need to be made to get the budget in line, than it has to be done,"  Halen said.