Steele cites errors in opposition arguments
In his February 20 letter to the editor, Bill Preston explained his reasons for opposing a quarter percent increase in the county sales tax to fund repairs to the Henry County courthouse. Mr. Preston is sincere in his opposition, but he is in error concerning many of the facts.
Let me note those errors:The cost of borrowing $2.5 million over a ten-year period is not $6 million. It is $1.098 million. $1.098 million is the amount of interest that will be paid for the bonds over the ten-year period. Due to the current economic situation, it is likely the interest rate will be lower when we acquire the bonds, thus lowering the amount of interest we will have to pay.
The administrative committee is basing the amount of annual revenue raised by the proposed increase on “prior history of monies collected,”?but the Illinois Department of Revenue has estimated a quarter percent sales tax increase will generate $900,000 annually.
The amount of revenue we need to generate is $463,672 annually in order to meet the requirements of the bonding companies. A quarter percent increase in the sales tax is the lowest amount allowed by law. We doubt that the increase will generate $900,000 annually, but we are certain it will meet the?$463,672 required revenue.
The issue of repairing the courthouse did not become a top priority in only three months. We have been looking at the need for the repairs for more than three years. Making repairs to the courthouse has always been an important concern.
The problem was how to pay for the repairs in a manner that would be best for the county taxpayers? We first searched for grant money. That search was a long process. In the end, we were only able to secure $5,000 in grant money.
We chose the sales tax increase because in December of 2008 the Illinois General Assembly amended the sales tax law to include public facility repairs. The sales tax amendment allows the county to raise the needed revenue and to direct that revenue only toward the cost of repairs.
The revenue raised from an increase in the sales tax will be put in a restricted fund and the money will accumulate in a manner that will allow the county board to rescind the quarter percent increase in less than 10 years.
This will occur because any money generated by the increase will be placed in a restricted fund for the purpose of paying off the 10-year bonds at the required rate of approximately $387,000 annually (principal and interest), and allowing any extra revenue to accumulate in the fund so the board can rescind the tax and continue to pay the bonds.
Due to bonding requirements, we cannot pay the bonds off early. But, we can accumulate revenue in the restricted fund to end the need for the sales tax increase in less than 10 years.
The county board is dedicated to ending the sales tax increase as early as possible and to only use money generated from it for courthouse repairs.
There is no way the needed repairs to the courthouse can be done in a “pay as you go” patchwork fashion. Such a plan would raise the cost of the project astronomically, would subject the courthouse building to further deterioration and would require more repairs.
The county’s “rainy day” general balance fund is not $3.7 million. The fund balance was reported at the January 2009 county board meeting by the Henry County treasurer to be $3.16 million.
That balance is not static and will diminish over the upcoming months. The fund balance is used by the county to meet its financial obligations and will carry the county to July 2009 when we will receive an infusion of property tax money.
By May 2009, the fund balance is projected to be $1.9 million. While the county does have a healthy “rainy day” balance, a $2.5 million assault on the balance would be devastating to the financial stability of the county.
All public institutions attempt to build and maintain a “rainy day” balance in order to meet their operating expenses. Having a surplus balance is a wise financial policy that has earned Henry County a triple “A” bond rating and causes our accounting firm to annually praise our financial report.
Repairs to the courthouse have not been neglected. Annual repairs have been made for decades. The courthouse is like any “house” or public building — those who are in charge keep the building in repair by annually expending money. But, then a big-ticket item comes along that demands immediate attention and requires a significant outlay of money. Such is the situation we currently face.
I?have served on the Henry County?Board for nine years. I am always impressed with the dedication of members of the Henry County Board — both Democrats and Republicans. Board members work hard to maintain quality services at a reasonable cost to the taxpayer; excellent county employees aid them in that endeavor.
The vast majority of the county board members understand the need for the courthouse repairs, and they see the wisdom of having repairs funded through a public facilities sales tax increase.
That is why every county board member who was in attendance at the January meeting — with the exception of one — voted in favor of placing the referendum on the April 7 ballot. And, that is why there is a county board bi-partisan committee working together on getting information on to the public concerning the issue of repairing the courthouse.
Tom Steele, chairman, Henry County administrative committee