Walkup Regoups on Valley Hi

After having his idea to transfer $37 million of the $41 million in the Valley Hi Fund surplus to the County’s General Fund for the purpose of cutting one year’s county government’s taxes in half (the tax take next year will be $74 million) shot down, County Board member and Board Chairman candidate Mike Wallkup went to the Valley Hi Operating Board meeting last night

This is his report:


Mike Walkup

Mike Walkup

I arrived at the Valley Hi Operating Board meeting and greeted familiar faces as I had been a member of that Board for two years before being taken off by County Board Chairman [Joe] Gottemoller last year.

During the time I was on the Operating Board, most meetings were somnolent affairs dominated by two hour monologues by the very competent Director, Tom Annarella, with few questions being asked by Board members other than corrections of typographic errors in the minutes of previous meetings.

The only change in the membership now was that former Democrat County Board Member James Kennedy is now Chairman of the Operating Board, replacing attorney Peter Michling.  Kennedy had been an Operating Board member during my tenure there as one of two County Board liason members, and was the typographical error watchdog mentioned above.

I spoke up during the ‘public comment’ portion at some length about the numerous concerns that had been expressed to me by county taxpayers over the past year about the size of the Valley Hi surplus, which now stands at nearly 4 times the total annual operating budget and for which the county is being sued on behalf of about 1500 county property owners.

As a result of my initiative last year, the County Board has suspended any additional levy for this year [cutting taxes by $3 million].

However, the surplus remains.

Valley Hi Nursing Home fund's cash on hand from FY 2006 through FY 2016 (projected).

Valley Hi Nursing Home fund’s cash on hand from FY 2006 through FY 2016 (projected).

Following my remarks, other members, including the two current County Board liaison members, Jim Heisler and Chuck Wheeler, as well as two of the regular Operating Board members who have health care backgrounds, made a number of positive, constructive and very civil comments.

These included the possibility that a portion of the Valley Hi surplus, which the State’s Attorney has indicated may not be able to be immediately refunded to the voters by transfer to the county’s general fund, be used instead as a loan to the county for the construction of certain capital projects around the government complex.

These include repairs to the leaking court house roof and resurfacing of the surrounding parking lots. In this way, the interest charged may be effectively paid back to the county, rather than wasted on outside bond holders. An interesting idea which will be explored further.

Jim Kennedy

Jim Kennedy

Following that, however, Operating Board Chair [Jim] Kennedy stood up (the rest of us had all remained seated during our discussions which take place around a large conference table) and proceeded to deliver a loud oration criticizing my motivations, and stating that the money in the surplus account “belonged” to Valley Hi as it was the result of the 2002 voter referendum, and that it could be spent down very quickly on the various capital projects for that facility, rather than being diverted elsewhere.

Obviously, I hit a raw nerve.


Walkup Regoups on Valley Hi — 14 Comments

  1. Capital projects for that facility?

    $41 million dollars spent down very quickly?

    The capital projects urgently needed, as stated at the last operating board meeting I attended, were about $350,000 for new beds, and $85,000 for a new bus.

  2. Sounds like the $23,000+ wipfli consultant report is going to find ways for VH board to spend that money on expansion.

    The report was to be made public in April but VH board is likely to have advance knowledge of findings.

  3. I’d bet that any governmental entity looking at a significant CapEx program is somewhat reluctant to pull the trigger to spend that money due to publicity and/or referendum requirements and/or costs associated with financing that project.

    If the Valley Hi Fund is to now be viewed as an internal bank granting inter-fund loans to finance various County CapEx projects, that benefit of an inherent check/balance on spending will be removed and make it more likely that the county will just dip into the Valley Hi piggybank to pay for projects.

    And, as long as Valley Hi operations continues as a roughly break-even operation, that $40 million fund balance will never go away.

    The only change will be that the Valley Hi balance sheet will reflect about $40 million in Inter-Fund Receivables instead of $40 million in Cash/Short-term Investments.

    I’m not sure using the Valley Hi Fund as an internal bank is consistent with Brandy Quance, Assistant State’s Attorney’s stated position that

    “The money collected as a result of the Valley Hi tax levy was for the construction, operation, and maintenance of Valley Hi.”

    Perhaps the only reasonable way to extricate the excess funds is to set a price on the Valley Hi operation, INCLUDING the excess fund balance and have a buyer write a check to the county for the entire amount.

    So, if the operations/fixed assets/etc are worth $10 million, the buyer pays $50 million payable to the county.

    And then the county can decide the fate of that cash.

  4. We can’t directly rip out the surplus, but we could force Valley Hi to make all of its expenditures from the fund and pay all of its receivables to the county. Depending on what its operating budget is we could eliminate the reserve fund in a matter of years.

  5. it is time “private lawyers” do what the McHenry County Board is incapable of doing.

    The levy was illegal when tax reserves at Valley Hi exceeded more than 1.5X annual operating expenses.

    Mr. Kennedy, it is not Valley Hi’s money rather the Illinois Supreme Court stated 60 years it is the taxpayers’ money, Valley Hi is just holding it under constructive trust.

    The Board should sue Valley Hi seeking imposition of constructive trust on these funds and request the court appoint a receiver for return of these funds back to the taxpayer where they belong. Mike, this is the strategy I recommended some weeks ago on this blog. It might be a case if first impression and you can make case law.

  6. I find it interesting that when he sat on this committee he saw nothing wrong with the cash hoard and now that he’s running for office and it’s been called to his attention (?) it’s an issue he’s willing to take up.

    Politics is such dirty business

  7. Jim Kennedy in charge?!!!

    That’s like putting a fox in charge of the hen house.

    What’s his take for zero work?

  8. The Mrs is spot on with the observation that Walkup was part of the problem.

    Why wasn’t Walkup objecting to the massive surplus before Joe removed him.

    Maybe it’s because Walkup has been around Government too long.

    Like Senator Dirksen said a million here a million there, sooner or later your talking real money.

  9. Walkup is grandstanding in an attempt to hide his career as a Democrat, and his lack of anything but the most superficial right to run as a Republican.

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