McHenry County Blog

The top of the Jan. 30th Tribune article.

David McSweeney knows how to pick ‘em.

And Jack Franks has been a master of gaining publicity for virtually his entire 14-year legislative career.

McSweeney came up with the idea to reform the alternative revenue bond process and had a bill drafted.

The changes he proposes and Franks buys into would give the taxpayer s of McHenry County College a change at defeating ill-conceived projects like the minor league baseball stadium and the proposed health club at the ballot box, rather than paying higher taxes for a couple of decades if the revenue stream identified to pay off non-referendum bonds turns into a trickle.

For those who don’t dip into McHenry County Blog that often, alternative bonds are a method approved by a previous state legislature that allow government entities, such as Lakewood with its early 1990′s golf course purchase, to borrow money for projects without going to referendum.

The premise in Lakewood’s case was that golf course revenues would pay off the bonds.

And who came up with the projections?

It was a golf course management company with no skin in the game.

I feel so personally involved because I and other Lakewood homeowners paid 53% of the cost of an amenity which I have never used.

The alternative bond document forced subsequent village trustees to flay repayments off the hides of us taxpayers.

McHenry County College is now trying to do this in order to build a health club and classrooms.

That addition space will cost a lot more than the now-re-named RedTail Golf Course, although the price per homeowner, if muscled through by the MCC Board and the revenue projected by the health club operator company Power Wellness don’t pan out, would probably be far less than the $500 a year that I remember paying.

There is currently a way that taxpayers can force a referendum when a taxing district like McHenry County College decides to borrow money without asking voters for permission, but the number of signatures needed on a petition is virtually impossible to gather.

In MCC’s case, state law now says that signatures of 7.5% of the registered voters must sign the petition.

That’s 7.5% of 182,766 voters.

Multiply that out.

My hand multiplication tells me that’s 13,709 signatures.

A bit more than the 500 that Jack Franks had to gather to put the County Executive referendum on the ballot, so he can certainly understand the statutory hurdle of those wishing to stop their tax bill from going up because of alternative revenue bonds.

The McSweeney-Franks bill would lower the petition signature number to 5% of the voters or 500 signatures, whichever is less.

The legislative proposal would also increase the length of time to gather those signatures from 30 to 90 days.

That would at least give the taxpayers a chance if the junior college decides it wants to borrow over $40 million without asking voters’ permission.

Besides the Tribune article on Wednesday and mine on Tuesday, the Northwest Herald has one today.

While the Tribune did not make the McHenry County College connection, the NWH did in its first sentence:

“Legislation filed this week in Springfield could make it harder for McHenry County College to fund its proposed expansion.”

And, the sub-headline reads, “The locally sponsored legislation could affect MCC plans.”

The article even mentions RedTail Golf Course.

The Crystal Lake Park District regularly sells bonds without a referendum. That’s how the West Beach House was financed. There are two seats on the Park Board which have no candidates. Two write-ins could win, but candidates have to register their intention to run. Email me if you are interested.

And a commenter under the article “Patrick F” of Cary points out that the Cary Park District was planning to buy a golf course (its second) with bonds not approved by voters.  (I believe he is mixing up the power that all park districts and other local tax districts that had non-referendum bonding in 1994–may be a year off.  State legislation I actively opposed allowed those with unpaid non-referendum bonds to forever use the amount being paid back in the year in question to finance new borrowing without voter approval.  That is how the Crystal Lake Park District is financing its new West Beach House.)

See articles summary of Tribune articles about what happened to Lakewood homeowners here:

• Lakewood Red(Ink)Tail Golf Club Alternative Revenue Bond Failure Featured in Chicago Tribune – Part 1
• Lakewood Red(Ink)Tail Golf Club Alternative Revenue Bond Failure Featured in Chicago Tribune – Part 2

Tuesday’s McHenry County Blog article (“McSweeney and Franks Send Shot Across McHenry County College’s Bow) about newly-introduced House Bill 983 can be found here.

Moraine Valley Community College sold alternative revenue bonds a year ago to finance a health club and other structures.

I’m looking at the alternative revenue bond statement approved by bond counsel Chapman and Cutler.

How does the document say they will be paid off?

“…payable from

1. the construction/infrastructure improvement fee imposed upon students of the District (the “Improvement Fee”), wellness center membership fees and other lawfully available funds of the District (the “Pledged Revenues”); and
2. ad valorem property taxes levied upon all of the taxable property in the District without limitation as to rate or amount (the “Pledged Taxes” and together with the Pledged Revenues, the “Pledged Moneys”), and all taxable property in the District is subject to the levy of such taxes…

That’s pretty much what Power Wellness’ so-called feasibility study is pointing toward for McHenry County College’s $45 million health club and other additions.

Page 6 of the document puts it this way:

If student fees and health club fees are not enough to pay back the bonds, money will come out of the education fund. That means repayment of the alternative revenue bonds at Moraine Valley Community College would come before paying faculty.

Of course, Moraine Valley only borrowed $5.4 million, not the $45 million that McHenry County College officials are banding about..

No need to ask for voter permission for these alternative revenue bonds.

And the team in charge of the MCC Board won’t.

And that means that if the project is NOT self-supporting, then the current MCC board has to cut funds available for operating purposes — including teacher salaries — for the next 30 years!

The proposed entrance to the minor league baseball stadium that struck out.

As the McHenry County College Board and a majority of the Crystal Lake City Council learned, most people don’t think their tax dollars should be used to prop up those wanting to build sports stadiums.

Now, Crain’s Chicago Business has popped for a 600-person survey on the subject.

Aimed at the efforts of the owners of Wrigley Field and the United Center to secure government subsidies, the survey, of course, does not mention the efforts of the MCC Board to force taxpayers to be the backup source to pay off millions and millions of dollars of bonds, if the proposed minor leage baseball team went belly up.

But, I imagine there would be similar results if MCC taxpayers or Woodstock taxpayers were asked if they wanted to shell out tax dollars to help pay for a sports stadium.

Quoting from the story:

“A whopping 80 percent — the majorities were overwhelming in Chicago, the suburbs and elsewhere — are opposed, agreeing that teams ‘as companies should pay their full tax no matter what.’”

That dropped to 50% against when the Cubs and United Center proposals were outlined, a bit lower in the suburbs (where, I would note, there would not be a cost for the proposed Chicago tax breaks for the stadium owners).

Valley Hi

The McHenry County Nursing Home’s bonds to construct the new complex have been paid off.

When the bonds for the Lakewood golf course were paid off (last year), the cut in property taxes was measurable this year.

It seems that the County Board wants to replace tax dollars used for bond payments with tax dollars to be used for operating funds.

No increase in tax rate, right?

But, no savings for the taxpayer.

More subsidy for the operation.

Consider these minutes from the Finance Committee:

“Mr. Hammerand stated that the Valley Hi Levy should be discussed in the future.

“He stated that since the facility is now paid off they need to have a conversation on these funds.

“Committee members were reminded that the levy was to be used to build the facility and maintain and operate the facility and in light of the State budget issues this will need to be watched closely.

“The facility will need to whether the State issues as well”.

They will need to be sure to continue to collect some of these levy funds in order to address any large future costs for repairs and maintenance.

The McHenry County College Board is planning to refinance $2.2 million of bonds and, thank goodness, they are not for the minor league baseball stadium the Board and President Walt Packard were pushing.

McHenry County College has $2.2 million in outstanding bonds, issued apparently without a referendum, for which interest higher than market rate is being paid.

The Board is scheduled to refinance them at Thursday’s meeting and save 2.5 percentage points, as I read the Board packet.

If my reading is correct, the college will save about $55,000.

A golf membership card arrived in the mail today from the Turnberry Country Club. The club has even figured out that my wife has played golf most recently, but somehow managed to call her a "Jr."

No initiation fees.

That’s what the post card I got today at my non-Turnberry Lakewood home said.

Just spend $355 a a month, if you join on your own, or $580 a month for the whole family.  Tennis courts included, but I don’t see mention of the swimming pool.

Four types of memberships are available at Turnberry Country Club.

The Turnberry Country Club, of course, was what Lakewood’s Turnberry Subdivision was built around.  It was a private club, but fell upon hard times.

There’s a lot of that going around, I believe.

See Lakewood’s “ Red Tail Golf Course in Trouble,” for instance.

Now, Turnberry is apparently loosening membership requirements.

I’ve wondered more than once recently why Lakewood’s taxpayer-owned golf course could not be combined with Turnberry.  The village could allow widening of roads between the two courses so golf carts could go from one to the other.

The Red Tail Golf Course Clubhouse would never be put on a promotional piece.

Maybe share clubhouse profits, if any.

Lakewood residents might want to attend the 6 PM village board budget hearing next Tuesday evening.

The bonds for buying the golf course will finally be paid off after this year’s taxes are collected.

Taxpayers will own the property and the question is what to do with it.

Advocates of Red Tail undoubtedly want to build a new club house to replace the trailers and, as long as I and other real estate taxpayers have no personal exposure, I guess that’s worth considering.

Watch my reaction if there is a proposal similar to the one in the early 1990′s, however.

Then, three of us when to a village board meeting.  I asked if it “was ever going to cost me a dime” and was told it would not, that the bonds to finance buying it would be revenue bonds, not general obligation bonds.

A former village trustee expressed the opinion that the village should not even consider being in the golf course business and Jim Bishop pointed out that golf courses were in trouble all over the county.

The definition of "member" is being loosened at Turnberry.

Imaging my astonishment when I discovered some sweet talking bond adviser convinced the village board to issue what are called “double-barreled” bonds.  They provide for payment by the general taxpayer (you and me) if the project’s revenue is inadequate to pay off the debt.

It was and we paid.

$500 a year.

That annual cost made me such a believer in having referendums before a public body can go into debt!

If my village board decides to follow that example, expect to see me petition in hand at my Lakewood neighbor’s doors…even if it is 10 degrees below zero.

You might think a school district’s budget has to show specifically where the money is going to come from to pay for its legal debt obligations that are due in this budget year

You might think in normal budgeting, state law and State Board of Education might require this.

A quote in a July 15th Daily Herald summed up what’s going on in Huntley District 158.

“We’ve got a $1.9 million payment due this year, and the impact and transition fees aren’t going to be enough to cover that,” District 158 Comptroller Mark Altmayer said.

Top finance guy and CPA Altmayer and Supt. John Burkey came up with this innovation:

This is the kind of financial finesse the General Assembly has done for years with required pension payments.

In case you haven’t noticed, that’s the main reason Democrats are pushing for a 50% and 67% income tax hike.

Maybe that’s where Huntley District 158 School District administrators got the idea.

It’s bad enough Burkey has a–to be polite–$449,405 discretionary fund budget line item. Page 37 of 62 of the expenditure budget has this line item (click to enlarge).

DO NOT USE–UNDEF BUDGET SAL $449,405 Placeholder for Admin and Non Union and Tier 2 Salaries

Page 37 of 62 can be found at http://www.district158.org/boe/BOE%20COTW%20Packet%2009-10/BOE%20SPEC%2008-13-09.pdf

With school starting you’d think administrators have hired who they need?

When local government officials don’t have to budget legal debt repayments that are still on the books and can budget a sizable mystery fund for salaries after school has already started, no wonder there are trust issues with ordinary citizens.

Illinois has a State Board of Education bureaucracy, but when these kinds of practices are what goes on for budgeting, are residents being protected from abuses by government employees and officials?

Maybe we should take to heart what Rep. Barney Frank (D-MA) said at a recent town hall meeting;

“Whoever told you to trust the government?

“You live in a democracy. I never asked anyone to trust the government. It’s not your mother, your father or your doctor.”

Apparently we can’t trust people in local government positions to budget the repayment of legal debt obligations. When a leading liberal in the U.S. Congress admonishes us about trusting government, you could say the truth is out of the closet.

And liberals wonder why a majority of Americans don’t want government to take over health care.

The District 158 Financial Advisory Committee meets Tuesday (tonight) at 7:30.

Maybe a majority of them will have enough financial and accounting common sense to insist the legal debt repayment be put in the budget until such time as the board has officially taken action to not have to make the payment.

In other words, “normal” budgeting.