Village president: Sleepy Hollow may cease to exist without tax hike

Sleepy Hollow officials are warning the village government may cease to exist if voters don't approve a property tax hike Tuesday.

Without additional revenue to fund services, Village President Stephan Pickett says Sleepy Hollow would have three options.

It could be annexed into another municipality, he said. It could unify with another town to become a separate entity. Or the government could be dissolved, and the village would become an unincorporated part of Kane County.

All of those alternatives would eliminate the elements of Sleepy Hollow that make it unique, Pickett said, such as restrictions for sheds and fences and the familiarity of police officers with the community.

"You would lose total control upon your own neighborhood," he said. "It's the everyday items that you don't really see, smell or touch, but are there on a constant basis.

"Basically, what everybody tells me they moved to Sleepy Hollow for would be gone."

During Tuesday's election, voters will be asked to approve a 33 percent property tax increase, which would collect an additional $180,000 annually from the bedroom community's taxpayers.

If the referendum is approved, the owner of a home with an assessed value of $200,000 would pay $132 more per year.

This would be the third time village officials are seeking a property tax hike in the past two years. An 82 percent tax increase was shot down by more than 80 percent of voters last April, and a similar request was denied in November 2014.

Fearful that voters would deny another referendum, officials said earlier they are requesting a smaller increase this time around to hold the village over temporarily.

Declining sales and utility tax revenues and increased personnel costs have left Sleepy Hollow in a tough spot financially, Pickett said. In addition to the general fund, he said, additional revenue would go toward road improvements and the village's depleting five-year capital fund, which is used for long-term expenses.

In the event the tax increase doesn't pass, Pickett said, the village would have to continue cutting personnel and services. Even then, he said, he estimates Sleepy Hollow would run out of money after about three years.

"The board's going to be handcuffed at that point," he said. That's where the three alternatives - annexation, unification or dissolution - would come into play.

All three options are driven by a referendum vote, Pickett said. If the village were to annex into a contiguous municipality, such as West Dundee or Elgin, the majority of residents in both communities would have to vote "yes." That would also be the case if Sleepy Hollow tried to unify with another municipality, meaning two towns would merge and become an entirely new community. Dissolving Sleepy Hollow's government and becoming unincorporated, Pickett said, would have to be initiated by a petition, followed by a majority vote. Then, Kane County would have control over all policing, roadwork and other services, he said.

"If a referendum to raise property taxes for the continuation of the village fails, we are dependent upon a referendum vote of the villagers for any of those alternatives," Pickett said. "It's really kind of ironic."