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updated: 7/27/2011 4:58 AM

Itasca seeks members for home-rule committee

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Itasca officials voted Tuesday to form a committee that will explore whether the village should seek home-rule status in a referendum during the March 20 election.

Village trustees and President Jeff Pruyn said becoming a home-rule community would allow Itasca to access thousands of dollars in tax money for efforts like infrastructure improvements.

The committee will be run by a chairman and vice chairman, who will then recruit residents, business leaders and representatives from other taxing bodies to participate.

The group must start debating the issue and disseminating information to residents and businesses by Sept. 1, then must finish by Nov. 30 and present a final report to village trustees.

Pruyn said the size of the committee is not yet limited, adding he wants to be "as broad-based as possible" and would welcome up to 50 people.

Officials said Itasca is considering the idea partly because its largest revenue source, sales tax, has dropped to $4.4 million per year after the fallout from the recession. Revenue also declined $2.8 million in the last three years and the current trend is flat.

As a result, Itasca cut services such as its $1.5 million per year road improvement program and, instead, spends about $560,000 annually on road overlays and milling. The village's general reserve fund also dropped to $2.5 million; leaders say it ought to be about $6 million to cover six months of operating expenses.

"The village historically has done a very good job of keeping up with infrastructure but, in the last few years, we haven't been able to keep up," said Trustee Jeff Aiani. "It's not critical yet, but it's going to be."

Village Administrator Evan Teich said home rule would allow Itasca to keep its sales tax rate at 7.75 percent -- below all neighboring communities -- but still collect more money since more items would be eligible for taxation under the new structure.

Home-rule status would also allow Itasca to access about $980,000 in annual hotel tax revenues, which currently can be used under state statute only for events and projects like festivals that generate tourism.

But residents Diann Dale and Ken Machynia reiterated concerns voiced previously, saying home rule can also allow leaders to exceed the property tax cap without a referendum.

"I'm worried about where home rule leads us," said Dale, adding future trustees might raise taxes without considering residents.

Several officials countered her concerns, saying all current and future board members are residents, too.

"What we do to you, we do to us," said Trustee Ellen Leahy. "We are not out to raise taxes. It's not us against you. We are in this together."