Valley Hi Financial Report

From the minutes of the Valley Hi Operating  Board’s February 24th meeting:

In FY 2015 there was approximately $10.4 million in revenues and $10.5 million in expenses.

It was noted that the operating income before depreciation was -$128,882, depreciation was $522,749 resulting in a net operating income of -$651,571, and the interest income was $79,423 which resulted in an overall net income for FY 2015 of -$572,148. It was noted that trending showed a growing reliance on the reserves to balance the financials which will only further grow without the tax levy in place.

The balance in the Valley Hi Fund is still over $40 million.

Within $5,000 of $41.5 million as of the end of February.

At a million “loss” each year, it would take 40 years to draw down the balance to zero.

McHenry County Board member and now we know successful candidate for the Republican nomination for Board Chairman Mike Walkup talked about the huge amount sitting in the bank during the public comment period, much as he did before the County Board’s Finance Committee.

That led to the County Board’s eliminating the $3 million Valley Hi levy for the tax bills that will go out this spring.

Here are the minutes from the discussion that Walkup started at the Operating Board:

Mike Walkup

Mike Walkup

Mike Walkup, County Board member, began a discussion on the Valley Hi reserves noting comments that he has heard on the campaign trail.

A discussion was held regarding a potential tax rebate and the tax levy.

He noted that the reserves needed to be reduced for the levy to be re-established.

He discussed the possible impact of a referendum to re-establish a tax levy in the future should the levy be allowed to expire and his belief that it would not pass.

Mr. Walkup proposed moving the reserve money to the McHenry County General Fund and providing a tax abatement for McHenry County residents.

Mr. Walkup referenced the lawsuit that was filed regarding the tax level and suggested that the Operating Board discuss the reduction of the tax levy.

Chuck Wheeler

Chuck Wheeler

Mr. Austin and Mr. Wheeler provided their thoughts on what was suggested and different scenarios for reducing the reserve level.

Mr. Wheeler spoke about the perception and the need to address the situation noting that he would like the Operating Board to bring something forward to the County Board on the matter.

He stated he believed at least $18 million in the reserves for operational security was necessary.

Mr. Wheeler also spoke about messaging regarding the tax levy and reserve levels.

Ms. Dreimann inquired about the possible legislative solutions to address the tax levy.

Mr. Austin spoke about the tax cap law and the current status of legislative and administrative solutions being sought both in Springfield and with the Department of Revenue.

Jim Heisler

Jim Heisler

Mr. Heisler inquired about the possibility of using some of the reserves as a loan for other County projects, which would reduce the reserves and allow for a potential future revenue stream as the loan is paid back with interest. Mr. Wheeler explained how he thought the process would work.

Jim Kennedy

Jim Kennedy

Chairman Kennedy spoke about the Operating Board’s past transparency and success getting the financial position back on track.

He spoke about the Capital Improvement and Asset Preservation Plan development to address the reserves over the coming years.

He spoke about how the information has been spun for political benefit and how he doe snot believe that sending the money to the General Fund and spoke about his philosophy for the future.

Ms. Ryan spoke about how she feels the discussions about the tax levy and reserves are politically clouded and her belief that the Operating Board and County Board have not communicated the need for Valley Hi, the potential changes due to Medicaid and Medicare, and the impact to the private sector and the McHenry County area if changes are made or Valley Hi was sold.


Valley Hi Financial Report — 4 Comments

  1. If playing games is a option, use part of the $$$$$ to pay off county debt.

    Interest earned is usually less than interest paid.

    Long run we as a county be better off than getting a small rebate in property taxes.

  2. “At a million “loss” each year, it would take 40 years to draw down the balance to zero.”

    That assumes no interest on the money

  3. Depreciation is not actual expense or liability but an accounting gimmick to encourage capital expenditure.

    Not sure what depreciation lends to the discussion on what it actually costs to run Valley Hi.

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