The Finance Fight over Valley Hi Taxes – Part 1

After Mike Walkup spoke about lowering the Valley Hi

After Mike Walkup spoke about lowering the Valley Hi Nursing Home levy, Nick Provenzano entered the debate.  Walkup can  be seen to the right.

First, Mike Walkup, not a member of the Finance Committee, asked that the Valley Hi levy be split from the others for voting purposes.

Pointing out that he had served on the nursing home’s Operating Board for two years, Walkup related how the Board had asked the General Assembly for permission to drop the levy and, then, reinstate it without referendum, but that request had not been acted upon.

Valley Hi Cash on hand 2006-13

This bar graph is one year out of date. The last bar would show a balance of over $40 million in the Valley Hi fund. To put that in perspective, the entire property tax levy for McHenry County is $79 million.

Walkup said the bank balance was $35 million when he went on the Operating Board, but now was up to $43 million.

“Do we continue to do this ad infinitum [forever]?”

At $1 million a year, he said, it will take us 40 years to get to that amount.

Walkup said he would like “a more robust discussion [by] split[ting this part of the levy] off as a separate item for Board discussion.

Next followed a robust discussion.

Provenzano, who is running in the District 3 GOP Primary effectively against Walkup (plus Nancy Gonsiorek – two will be nominate) seemed to put up a defense of the proposed million on the grounds of process, saying lowering it was “not something you take sharp turns on.”

Nick Provenzano addressed Mike Walkup's Valley Hi levy reduction initiative.

Nick Provenzano addressed Mike Walkup’s Valley Hi levy reduction initiative.

He argued that the topic should have been brought up six months ago at the beginning of the budgetary process.

He took offense with Walkup’s contention that “we haven’t had a robust discussion.”

At the outset of the debate, however, he did say,”I don’t necessarily agree that we should be levying the same amount.”

He added, “We’re talking about a levy to protect and care for human beings that have no place to go.”

Provenzano pointed out by keeping the total levy constant for four years that taxpayers had been saved $16 million.

Committee Chairman Skala said there had been “many discussions about the [large balance].

Mike Skala argued for continuing the $3 million levy for Valley Hi.

Mike Skala argued for continuing the $3 million levy for Valley Hi.

“$3 million pretty much matches up with expenditures.”

Walkup disagreed, saying that the figure was closer to “$1 million.”

Skala then revealed that there had been “preliminary discussions of borrowing money from ourselves [the Valley Hill fund], bt again we needed a revenue stream to pay that back.”

County Administrator Austin talked of the modeling that could be done for different potential reimbursements from the Federal and state governments.

He also mentioned the possibility of borrowing some of the nursing home money would be discussed with the Facilities Committee in the next few months.

Austin pointed to the new nursing home that Centegra was proposing, which would taken the more profitable Medicare residents. (Centegra has pretty much stopped sending Medicare admissions to Valley Hi already.)

County Administrator Peter Austin explained how previous reductions from $6 million to $3 million in the Valley Hi levy had been re-allocated to other portions of the County tax levy, that the Valley Hi levy reductions had not resulted in taxpayers saving any money.

County Administrator Peter Austin explained how previous reductions from $6 million to $3 million in the Valley Hi levy had been re-allocated to other portions of the County tax levy, that those Valley Hi levy reductions had not resulted in any savings to taxpayers.

He also outlined how $16 million of the over $40 million could be spent:

  • $5 million for a capital cushion
  • $1 million for an insurance cushion
  • $11 million for a 12 month reserve because the State is so slow in paying

“It’s more about $20 million,” Austin, McCann said. “And nobody will notice the difference.”

= = = = =
More tomorrow.

Previous articles on the meeting:

= = = = =
If you would like to call or email your county board members to express your views on whether they should levy the $3 millions or not, you can find their phone numbers and email addresses here.

The draft levy ordinance can be seen below:

Levy ordinance draft 10-15-15 1Levy ordinance draft 10-15-15 2


The Finance Fight over Valley Hi Taxes – Part 1 — 13 Comments

  1. We don’t need more than 7 county board members, we have 24.

    None are experts on the subjects they sit around a talk, talk, talk about with little or no satisfactory results to the taxpayers, what’s wrong with us?

    All these politicians want to hear themselves and see themselves in their narcissistic beauty.

  2. If there are seven, my prediction is that they will have full-time salaries, individual offices and assistants.

  3. You do not have to search too hard to determine why McHenry County property taxes are some of the highest in the country.

  4. To correct Mr. Skala’s comment, Valley High has an annual operating cost of around TEN Million Dollars.

    Prior to this year it was bringing in approximately 9.5 Million Dollars in revenues from various sources including private pay, Medicare and Medicaid.

    This created a deficit of around $500K per year which was paid out of the levy.

    Previous levy amounts had been as high as SIX Million Dollars per year.

    This was reduced to THREE Million Dollars while I was on the VH Operating Board.

    This past year, due to problems in Springfield, it only took in about 9 Million Dollars, so the deficit was ONE Million Dollars (some of that may still be owed and received later).

    Operating expenses have NEVER been THREE Million Dollars as Mr. Skala claimed.

    The latter figure is the amount of this year’s Levy, and does not represent either operating costs or the deficit amount.

    Although there have been “many discussions about the large balance” these have taken place in a couple of committees and not with the participation of the full Board, nor has anything resulted from those discussions to date.

    We just keep kicking the can further down the road and every year that can costs the taxpayers another $3 Million.

    Meanwhile we continue to accumulate and enlarge a nest egg that is going to be used for what, exactly?

    As an aside, which may be further covered in what appears to be another contemplated installment, the Finance Director stated later in the meeting that when we reduced the levy amounts in previous years, that did not result in any savings to the taxpayers as that money was just shifted into other funds.

    The jaws of several Finance Committee members dropped noticeably at that point.

    We will be taking this up further at Tuesday’s Board meeting, I expect.

  5. That a stunning revelation:

    when referendums pass allowing collection of taxes, have no expectation that the money will be used for the purpose intended, money can be collected on behalf of this referendum target in order to evade PTELL taxpayer protections.

    Shouldn’t this be included as a warning on future spending referendums?

  6. It is a flatly false statement that collecting millions more in taxes than is needed “saved” the taxpayers $16 million.

    The problem here in McHenry County is that too many governments have been “saving” the taxpayers’ money that way for years.

    The argument that Valley Hi needs a massive fund balance is also false.

    I’m in the finance business, and every business knows that the size of the fund balance should be no more than the biggest cash flow deficit they run during the year plus a modest reserve, and even this can be reduced by the use of a line of credit to tide over seasonal imbalances.

    Let’s be clear about what’s going on:

    the County Board has not appointed taxpayer watchdogs to the Valley Hi board or any other board.

    Instead they appoint advocates for the cause.

    The Valley Hi Board has been over-taxing for years to build up enough cash to build a big addition to Valley Hi or a brand new nursing home without having to ask the taxpayers’ permission.

    Taxing more than the government needs is wrong.

    In fact, the courts in Illinois have ruled on EXACTLY this issue — in favor of the taxpayers.

  7. Cal’s statement: “If there are seven, my prediction is that they will have full-time salaries, individual offices and assistants.” is spot on!

    Bigger always results in more expense in the public sector.

    The same logic applies to township consolidation which would result not only in bloated salaries for the elected positions but also in the full time employee salaries and benefits.

    In the private sector, bigger does generally result in some efficiencies but that is rarely ,if ever, the case in the public sector.

  8. What!?

    Those salaries already sound full-time to me.

    What kind of prediction is that?

  9. Not many people would consider $21,000 a year a full-time salary.

    Even adding health insurance for those with the most dependents, it only brings them up to about twice $21,000.

  10. I would!

    They get all the benefits package, too?

    That would be quite a raise for me!

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