flag image
Aurora

All about the numbers


Lawsuit, room taxes throws budget out of whack



shadow
shadow
August 25, 2010 | 08:53 AM
Fontana — In last year's budget, there were two undesirable line items— an expensive lawsuit and a decline in room tax revenues.

In 2009, Fontana collected $89,541 less than anticipated in room tax revenues and paid out $450,000 for two parcels after a lawsuit. It also had to pay $118,000 in legal fees.

If it weren't for lower than anticipated room tax revenues and the lawsuit, the village could have avoided shortfalls and overspending in 2009.

On July 29, the village received a 74-page audit of Fontana's financial state.

The room tax shortfall and litigation costs were known to village officials well before 2009 ended. This allowed the village to implement a budget freeze in fall 2009.

"The budget freeze was definitely a positive attribute to the 2009 audit report," Village Administrator Kelly Hayden said.

With last year's tax shortfall, the village has closely monitored the funds collected by the Abbey Resort, which makes up the bulk of its room tax revenue.

Since June, the village has collected $6,567 more in room tax revenue from the resort than in June 2009.

July and August are the resort's biggest months. However, room tax revenue for the summer months won't be reported until the end of September.

ad
click to see advertisement
Hayden is optimistic the Abbey Resort will have a higher occupancy rate than previous years and should provide more room tax revenue to the village than last year. That's because she has heard reports that the resort has been busy and sold out at different times.

Room taxes weren't the only revenue stream where the village fell behind its budgeted. The village's investment income was about $15,242 less than budgeted.

Lawsuit

Bruce Wilkinson and Kathy Galik-Wilkinson, Lake Forest, Ill., filed a lawsuit against the village after they were unable to develop their lots in the Country Club Estates subdivision.

The lots were zoned residential, but served as a natural area for stormwater to flow. During large storm events, the lots filled with water, which stood from several hours to several weeks.

The village's engineer report stated the properties are used as a detention basin, which the Wilkinsons used to their advantage during the litigation.

To date, the Village Board hasn't discussed any future plans for the lots.

In addition to purchasing the two properties for $450,000 the village also had to pay $118,000 to the Wilkinson to cover their litigation, engineering and architecture costs.

Village's debt

The village has more than $19 million worth of debt, which includes dollars spent by the Community Development Authority, the water and sewer utilities and its general funds.

ad
click to see advertisement
Although the village has $19 million in debt, it isn't even close to maximizing its credit. State statutes restrict the amount of debt in a community to 5 percent of its equalized value — the total assessed value of all the properties in the community.

The village's equalized value is $1.3 billion. It could borrow up to $66.3 million.

Of the 19 million in debt, about $16 million can be attributed to the Tax Increment Funds.

In 2001, the village created the TIF district.

Within the TIF district the village has completed projects, which are anticipated to increase property values within the district.

The increased property value create a larger tax base for the village, which is used to pay back the borrowed funds.

Since the tax increment district was created, the village has spent about $19 million in TIF and about $3 million last year.

So far, the village has collected about $3.5 million in tax increment and about $1.1 million was collected last year.

printPrint
emailEmail
CommentFeedback
shareShare
Comments ()
Community Bank
Young Auditorium
LAKE GENEVA AREA REALTY
Regional News