Homer Glen continues bond issue talk
By Michelle Mullins For The Herald-News August 15, 2012 7:56PM
Updated: September 17, 2012 1:02PM
After more than 200 people crowded Homer Glen Village Hall Tuesday in hopes of learning more about a proposed $50 million bond ordinance, the village board slated further discussion for Aug. 28 at Homer Junior High School.
The board is deciding whether to spend, at first, $25 million to pay for a variety of capital improvements. Of this money, about $2.6 million would fund traffic signals, multi-use paths, lighting and planted medians which is the village’s responsibility in the Illinois Department of Transportation’s 159th Street widening project.
Another $6.5 million would improve detention ponds, streets, sidewalks, curbs, lighting and other public amenities in subdivisions that were not finished when the housing market collapsed and which were not backed by a letter of credit by developers.
Another $6.1 million would fund the Fiddyment Creek sanitary and sewer line.
But above all, the village has budgeted about $8.9 million to pay for Homer Glen’s portion of the Bedford Park water transmission line that the village and four other communities hope to acquire through eminent domain.
Residents have longed complained about the high price of water, and the village along with Bolingbrook, Woodridge, Lemont and Romeoville have formed a water agency to buy the Bedford Park water transmission line from American Lake Water.
The agency has made an offer of $34 million for the line, but water officials maintain the line is not for sale and any action would be a long and expensive court process.
“Illinois American has been a sore in our side for a long time,” Mayor Jim Daley said. “At the end of the day, this village has to do what is right for 24,200 people.”
Trustee Mary Niemiec said a household paid about $66 for 5,000 gallons of water in 2005, but today pays $145 for the same amount of water.
A family of five using about 11,000 gallons a month pays more than $190 each month, while a Mokena resident using its municipal-run system pays about $96 a month for the same amount of Lake Michigan water, she said.
Niemiec, who helped start the sewer and water task force in 2004, said she is fed up with Illinois American Water’s high rates and poor customer service.
“We had to force them to inspect fire hydrants through a court order,” Niemiec said. “One of the fire hydrants we found not working was in front of a school. … It’s a monopoly. When a vital resource is owned by a monopoly, those of us in government are mandated to protect our residents.”
The village would be able to take advantage of historically low interest rates and a AA rating from Standard & Poor’s to secure the money cheaply, according to Bill Hofherr, senior vice-president of George K. Baum and Co., the village’s bond counsel.
The bonds will be paid back through the 1 percent home rule sales tax and are expected to retire in 13 years, Hofherr said.
“The money is extremely cheap from a borrowing perspective,” he said.
The village’s sales tax revenue has been increasing from $1.2 million in the fiscal year ending April 30, 2010, to $2.7 million this past year, village finance director John Sawyers said. The village projects $2.9 million in sales tax revenue in fiscal year 2013.
The bonds will be paid for with no more than $2.4 million of the home rule sales tax per year, officials said.
Some residents in attendance Tuesday told the board there should be a referendum proposal on whether to sell the bonds on the November ballot.
“Let the people decide what direction we are going,” resident Bob Schmidt said.
The village does have a home rule referendum question on the ballot. Since the village’s population dipped below 25,000 residents, a vote is needed to continue home rule. If voters fail to approve home rule, the sales tax won’t be lost if it is attached to the bond debt.
Other residents, particularly those on well-and-septic systems are concerned about paying for the water transmission line.
Resident Bernie Kucharski, who has well and septic, said only the 80 percent of residents who have Lake Michigan water should have to pay for the line if the sales tax doesn’t cover costs.
Michael Smyth, senior operations manager for Illinois American Water, said government tends to under estimate the cost to take over a water and wastewater system, and cautioned the village board that no one knows the value a judge would place on the pipeline.
Village officials said if a judge determines the cost of the pipeline is too much, then it will walk away from the purchase.