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posted: 3/21/2013 5:04 PM

Road project expected to dampen sales tax revenue in Round lake Beach

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The slow emergence from the recession has been bad enough, but Round Lake Beach officials expect another economic punch to take a toll.

As they considered spending plans recently, village leaders expected money saved from previous cuts, retired debts and completed projects could be supplemented by commercial growth to create a base for ongoing maintenance and other work.

However, the depth of the recession and sluggish recovery changed the plan, finance director Brian Gosnell said. And starting this summer, the Rollins Gateway road project in the heart of the village's commercial area at Rollins Road and Route 83 is expected to create other challenges.

"The budget projects a 20 percent decrease (in business) for the retailers in that corridor," Gosnell said of the 18-month project to lower Rollins beneath a railroad bridge that will replace the at-grade crossing, widen the intersection and make other improvements.

And that estimate could be low, he added.

The expected hit comes at a time when growth remains stalled, Gosnell said, and the massive project likely will delay more funds from major commercial growth for the next three years.

Sales tax projections in the recently approved 2013-14 budget have been pared by $274,370 from last year. About $170,000 of the drop is attributed to the gateway work and the rest due to a lack of growth. Actual sales in 2012-13 are expected to be about 0.5 percent below 2011-12.

"It's been needed for over 20 years now," Mayor Richard Hill said of the road project. "We're concerned about our sales tax revenue the next year but it has to be done."

The approved budget of $23.1 million came with the message that long-range planning is needed.

Two special taxing districts, which target specific geographic areas for improvements, expired last year, and millions of dollars in local road rebuilding and resurfacing paid for with borrowed funds have been completed.

With growth at a virtual standstill and the Rollins Gateway a wild card, officials decided to focus on updating the village's long-term capital plan rather than pursuing major projects.

"We obviously aren't going to have the big dollar ones until after the gateway is done," Gosnell said.

In the current budget, the number of authorized full-time positions was reduced by three without layoffs. The number of full-time positions has dropped from 99 in 2008-09 to 83 for 2013-14.

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