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updated: 11/6/2012 10:35 PM

Tax increase diving for Old Town

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About 65 percent of the voters Tuesday rejected a tax increase for the Old Town Sanitary District, putting the system at risk of running out of money, said Prospect Heights Mayor Nick Helmer.

Residents voted 2,696 to 1,433 to reject the tax increase, according to unofficial results on the Cook County Clerk's website.

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The proposal sought to almost double the tax the district could levy. Bill Kearns, president of the district's three-member board, had said it would add about $14 to the average tax bill in the district.

"The writing is on the walls," said Helmer. "The situation worries us because it requires the upkeep of our sewer system. And now they may not be able to keep up that system."

Helmer said Old Town handles about 80 percent of the sewers in Prospect Heights. The district also owns sewers in parts of Arlington Heights, Mount Prospect and Wheeling.

Years ago, officials of the Old Town Sanitary District decided to spend down its reserve and cut taxes. Reserves were at least $400,000 when the board cut taxes, but now they are down to about $60,000. The district can't raise its tax rate without voter approval because of the tax cap.

The district's current budget is about $130,000 a year, Kearns has said, which he calls bare bones, not allowing any upgrading in the system.

The district, established in 1967, was scheduled to be disbanded in the middle of the last decade when the last of its area became incorporated. But residents at that time had voted to keep the district.

Attorneys believe the district can be dissolved with the sewers being turned over to the local municipalities either with a referendum or by getting a law passed in Springfield.

•Daily Herald staff writer Deborah Donovan contributed to this report.

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