Yorkville, Illinois - Mayor's Office

City Government

From the Desk of Mayor Valerie Burd...July 2010

We are working through a bad recession. People who have lost jobs or whose homes have been foreclosed know things are bad. Money is tight and unfortunately, these hard times are also hitting your City government.

In 2004-06, the City issued bonds to extend water and sewer lines for new construction, and to pay for removing radium from our water, something that was mandated, but not paid for, by the State of Illinois. Many of the homes were never built, because of the recession. As a result, the City did not get the anticipated revenue in to make the payment on these bonds, beginning in 2009. At the beginning of this fiscal year, the City was $1 million in deficit in our Water Fund and we were looking at a $1.8 million deficit by the end of the fiscal year.

The Water Fund is an enterprise fund. It is supposed to be completely self-sufficient, based on revenue coming in from tap-on fees paid for by new residents, and from our water bill payments. Cuts were made in the department that operates water services, but it wasn’t possible to cut enough to eliminate the deficit to make the bond payments. To meet the City’s obligations, the City Council voted on May 25 to increase your water rate by 5 percent to $12.54 up to 350 cubic feet of usage, and to apply an $8.25 infrastructure surcharge per month until April 30, 2011. It was not something that any of the members of the City Council wanted to do. No one could come up with any other solution.

The City Administrator has estimated that if there are 200 tap-on fees coming into the City this fiscal year, we can abolish the surcharge. That is why the Council is open to discussing extending the freeze that Pulte was given in 2005 on building fees, when the economy was still going strong. Consequently, if building stops because Pulte can’t compete, the City won’t get any fees. One hundred percent of nothing is nothing. The freeze was also extended for Crestview Builders, which purchased the Blackberry Oaks development.

If the recession hadn’t hit, these developments probably would have been completed. It makes sense to me to encourage them to go ahead and finish what was started, so that we don’t have as many vacant lots that need to be maintained, and so that new residents can help alleviate the burden of the bond payments for infrastructure improvements.

The City Council also recently implemented a 3 percent amusement tax, to go into effect on Oct. 1. Raging Waves already had agreed in an annexation agreement to pay a 5 percent tax. The new tax will be levied on services, such as bowling or pool, that are not currently taxed—30 cents on every $10. The City of Oswego recently raised its sales tax one percent across the board on all businesses. The amusement tax is less invasive, and an average 50 percent of it will be paid by people coming into our community from the outside, instead of entirely by our residents. This tax will not be levied on food in restaurants, or on any other service that is already taxed. Hopefully, if the new sports complex comes in on the City’s north side, we will be able to get revenue in to help pay for infrastructure costs that growth has brought.

If we could have found any other way to pay our bond payments, we would have taken that path. We could not cut enough employee jobs or services to eliminate our Water Fund deficit. The former City Council had thought that new growth was going to pay its own way. Unfortunately, it didn’t work out that way. The recession hit. Growth all but disappeared. But we all are still responsible for these bond payments.
—Mayor Valerie Burd

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