|
|
 |
 |
 |
 |
News
Oswego panel discusses ways to boost revenues : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, IllinoisOswego panel discusses ways to boost revenues
| Flat fee on utility bills, doubling of water service tap on fees among proposals
| by John Etheredge
| 2/18/2010
|
Among the potential options for the Oswego Village Board to raise revenues to close deficits in the village's two major budget funds are placing a flat fee on village utility bills and a doubling of water connection or 'tap-on' fees charged to local housing developers.
Members of the board's finance committee discussed those and other options during a meeting this past Wednesday evening.
The committee is scheduled to continue their discussion when they gather again next Wednesday, Feb. 24 at 7 p.m. at village hall.
Last fall, the village board voted to reduce a $934,000 transfer from its water and sewer fund to its general fund by $700,000. The board acted to stem a rising deficit in the water and sewer fund. The transfers had been completed annually over the past several years in part to pay a portion of the village's administrative costs for providing water service.
For the coming fiscal year that begins May 1, Terry Michels, finance committee chairman, said the committee is not recommending any transfer of funds from the water and sewer fund into the general fund.
Mark Horton, the village's finance director, noted that the current deficit in the village's water and sewer fund "is not getting better (and) as it gets worse, the general fund has to support it which then hurts the general fund."
Horton confirmed there is currently a reserve balance in the general fund, which he attributed to the transfers over the years from the water and sewer fund.
Had those transfers not been made, Horton said village officials would likely be now talking about how they could shore-up the general fund instead of the water and sewer fund.
Horton added that a zero balance or negative reserve "can't happen (in the general fund) because the fund supports all the employees and everything in this village."
Terry Michels, finance committee chairman, attributed the deficit to a "problem of government."
Michels said, "The basic principle when we are talking about our general fund is we are still spending more than we are taking in."
Horton presented four potential options to increase revenues in the village's water and sewer fund.
The first option would be to do nothing-which Horton said would not solve the village's budget dilemma-the other options called for the addition of flat, monthly fees of $5, $10 and $15 on village water bills.
Horton said the $5 monthly increase would not generate enough revenue, while the $10 increase "makes a little more sense."
Horton added that there are other options the committee could consider, including a water rate increase, as a private consultant hired by the board last year recommended.
"Whatever way we're doing it here, whether it's a tap on fee, a flat fee on every bill per month or increasing water rates, there is a fee increase somewhere and it's just another way to bring in more revenue to offset expenditures from the fund," Horton said.
Double water
connection fees?
The committee also reviewed a fifth option, a proposed doubling of the village's water service connection or 'tap on' fees proposed by board member Jeff Lawson.
Under Lawson's proposal, the village's water connection fee would increase from $6,250 to $12,950. "If we fix our tap on fee quickly, I have no doubt we can rebuild our water and sewer fund as well as create a tap on reserve of restricted money that will help support our debt payments that allow us to build our operating profits so we can get out of the debt from past mistakes," he said.
Lawson also expressed concern that if the board were to impose a flat fee on its utility bills to raise revenues for the water and sewer fund, "it will never go away."
Lawson added he believes the village probably should have been incrementally increasing the tap on fee over the past several years as homebuilding in the village accelerated.
Michels agreed.
"Clearly the fees that were collected when growth was booming were not sufficient enough to meet the debt," he said. "Incrementally those fees should have risen. If we had done that we wouldn't be in the position that we are now because of the decisions that were made previously."
Board member Dave Schlaker and Scott Volpe praised Lawson for his initiative in studying and proposing the tap on fee increase.
Volpe suggested it would provide an "easy way to plug some holes without having to go after existing residents."
Schlaker, however, citing last year's dramatic slowdown in homebuilding, expressed concern over the village relying on revenues that may not be there if new home construction slows even more.
"My greatest concern is that these aren't guaranteed funds and we need a guaranteed solution," he said.
Board member Judy Sollinger said she is concerned that a doubling of the connection fees will serve to stop growth completely in the village.
"I don't think we'll see any growth at all if we raise the tap on fees to $13,000," Sollinger said. "I really don't. Already we are the highest of all the communities around here."
Looking ahead, Horton said he would recommend the board eventually do away with the discount water rates it now offers the village's senior citizens and the annual increases in the village's water rate that are based on the Midwest Consumer Price Index (CPI). Instead, he said, he recommends village staff complete annual, internal water rate studies and then calculate how much of a rate hike is needed to cover the village's expenses.
Referring to those annual studies, Horton said, "It would say, 'Here, based on the expenditures from the fund and what we're expecting for next year and the year after---and we have to save money for capital improvements down the road-this is what the water rate needs to be to save the much money."
For example, Horton noted the village is currently faced with having to spend $800,000 to repaint the water tower in the Ogden Falls Subdivision, just south of the U.S. Route 30 and U.S. Route 34 intersection.
"We don't have $800,000 in two years to pay for that," he said. "We would need to increase the rate to save for that expense if, indeed, it needs to happen in two years. That's $400,000 in two years. That's going to be a pretty hefty water rate increase. Those are the kinds of things that have to go into that water rate study."
|
|
 |
 |
 |
 |
|
|
