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CDA budget mostly zeros


Deficit projection higher than last year's budget estimate



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Hayden
June 08, 2011 | 08:57 AM
Fontana — The expenditure lines in the Community Development Authority's budget are mostly filled with zeros.

CDA Budget PDF

In fact, this year there will be no spending on any projects. Instead, the CDA will only shell out funds toward two line items — debt payments, for interest and principal.

Despite the absence of new spending, the CDA's budget is projected to come in $121,807 in the red. The CDA's budget coming in negative isn't a surprise, but this deficit projection is about $35,000 more than the $87,000 deficit budgeted for last year.

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During the Village Board's Monday night meeting, it approved the CDA's 2011 budget. The village's general fund has to cover the shortfall from the CDA.

Village Administrator Kelly Hayden said she is "concerned," but she isn't "panicking" about the budget projections. That is because the projections could change before the end of the year, and the village has projects in the works that could reduce the impact of the CDA's shortfall.

"We are in June and we still have time to change things around," she said.

One way the village could potentially bring the CDA's deficit back to the projected amount is by working with developer Brian Pollard. Pollard and the village are cooperating to develop the village-owned site at 138 Fontana Boulevard, which was formerly the Headquarters hair salon.

Hayden said the village makes conservative estimates for other revenue projections and if those come in higher it could cover more of the deficit. In its budget, the CDA projected collecting about $30,000 in beach revenues. In 2010, the CDA collected $35,303 in beach revenues.

The CDA receives $1 for every person who pays a fee to enter the beach. Hayden said if there is nice weather throughout the summer, it likely will collect more in beach fees.

"I'm not panicking at the $121,000 because it is an estimate and it is very possible to end right back at the $87,000," Hayden said.

The CDA's financial advisers, Ehlers & Associates Inc., of Brookfield, provided the village with last year's estimate.

One of the main reasons the CDA faces financial woes is because the amount of tax increment it creates dropped by almost $300,000 from last year. In previous years, the increments had been increasing.

The drop in the increment can be directly attributed to a 2010 change in how the Department of Revenue values the Tax Increment District.

In previous years, the DOR valued the TIF district using a formula. Now the state uses the assessor's value, which dropped the value of Fontana's district by $26 million overnight.

This change, depending on real estate growth, also could place the TIF district in debt until 2020. However, the TID should close with a positive balance.

Past spending

In the course of the CDA's existence, which began in 2001, the group has completed several major projects in the village.

The Highway 67 project cost the CDA about $4.8 million. The village spend about $1.3 million on the lakefront, which includes the beach house and the Reid Park pedestrian system.

An additional $5.5 million was spent on improvements to Fontana Boulevard and Third Avenue, which includes improvements to storm and sanitary sewers and placing utilities underground.

An additional $5.2 million was spent on miscellaneous projects, which includes improvements to Duck Pond, the Main Lift Station, bike paths at Wild Duck Road and facade improvements in the downtown.

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