By Michael S. Hoey
CORRESPONDENT
The Darien Village Board on May 20 approved interim financing of $1.47 million to build a new Village Hall.
The village was awarded a U.S. Department of Agriculture loan to cover the costs of building the hall. But, Administrator Diana Dykstra said interim financing is necessary because work will be done and contractors will have to be paid before the funding from the USDA becomes available to the village. Village auditor Pat Romenesko agreed and said interim financing is common with government loans.
Attorney Brad Lochowicz said the USDA loan is like a reimbursement and said the village might not need to use the entire $1.47 million depending on when the USDA financing becomes available. He said the USDA will not commit to the loan if interim financing is not obtained.
Dykstra said the need to borrow in the short-term was anticipated, however Trustee Jim Abbott said he does not remember the issue coming up during the budget process. He said the USDA loan was pitched as a great deal but now the village must borrow additional money for the project.
Trustee Molly Jo Baars said the amount being borrowed is a lot for the village to take on and she was not comfortable approving it. She also questioned if the borrowing would negatively affect the village’s debt.
Dykstra said the short-term borrowing will not hurt the village, the village has the money to cover the payments, and the borrowing will not result in an increase to the tax levy because of levy limits. Dykstra said the USDA loan is an opportunity the village will never have again.
Trustee Bob Wenzel said the USDA loan will pay off the interim financing, so the only extra costs to the village by taking out the short-term loan will be the 1.5 percent interest the village will pay on it. He said the village is going to be in good financial shape in 2016 when its Tax Incremental Financing District will be closed.
The motion to approve the interim financing was approved 4-2 with Abbott and Baars opposed.
Water utility help
Romenesko presented the village audit and said the water utility needs attention. Romenesko said the village fund balance in 2012 was $791,301. That number by itself is healthy, Romenesko said. Further study revealed, however, that the village’s general fund acted like a banker to other village funds and was actually $117,911 in deficit.
Romenesko said most of the advances to other funds went to the water and sewer utilities. He said the sewer utility is marginally healthy but the water utility, which received most of the help, is in need of attention.
Because of struggles in the water department, the Public Service Commission required the village to raise its water rates by 3.2 percent beginning May 1. Dykstra said the requirement was a result of the combination of the financial struggles of the utility in meeting operational costs and a number of unfortunate things like water main breaks and work to reduce infiltration. Dykstra said the village fought the rate increase because it expects to be in better financial shape with the closing of the TIF in 2016, by possibly refinancing some debt and through savings realized from contracting with the City of Delavan for police services.
Filling vacancy tabled
The board tabled filling the vacancy created by the resignation of newly elected trustee Robert Krueger until the June board meeting. Krueger was elected in April but resigned when it was determined his position as Emergency Medical Services chief presented a conflict of interest. Board President Kurt Zipp asked board members to come to the June meeting with nominations to fill the position.
