Lake in the Hills considers taking over sanitary district
Lake in the Hills village officials are studying the impact of possibly taking over sewer services from the local sanitary district upon the urging of McHenry County Board Chairman Jack Franks.
The Lake in the Hills Sanitary District provides wastewater collection and water pollution control - funded through taxes and user fees - to roughly 40,000 residents within 11 square miles. It has 11,700 mostly residential customers in Lake in the Hills and parts of Crystal Lake and Huntley.
A village analysis estimates $400,000 in savings could come from consolidation, primarily through cutting $258,000 in personnel costs by eliminating positions and reducing salaries, taxes, insurance and pension costs, according to Finance Director Shane Johnson.
The district has 10 nonunion employees, of whom three are part-time workers. If consolidation goes through, the village would keep seven full-time employees, who would be unionized. Roughly $100,000 in potential savings could come from reduction of postage, billing and collection expenses.
Officials plan to review consolidation as part of discussions on the village's strategic plan this summer. The primary concern is whether consolidation would actually result in cost savings for taxpayers, Village President Russ Ruzanski said.
"There are some unanswered questions," he said. "Obviously, if it makes sense, it's a darn good idea. We have to be able to handle it on our end. And then you have some jobs at stake there too that we have to consider. Our answer is going to rely on: Is it affordable, does it save money, and can we run it as efficiently as the sanitary district?"
A three-member board appointed by the McHenry County Board oversees the sanitary district. One sanitary district board member - David McPhee - was tapped earlier this year by former Lake in the Hills Village President Paul Mulcahy to fill a vacancy on the village board.
McPhee has not been replaced on the district board, said Rick Forner, sanitary district manager.
Forner, who does not support the idea of consolidation, said Franks wrote the legislation that prompted this move, yet its goal was elimination of unnecessary or duplicate government services. "We are neither," said Forner, adding the village does not provide any sanitary sewer services.
Dissolving the district would result in eliminating its tax levy, which generates between $600,000 and $700,000 a year.
"You have to replace that lost tax money and the only way you are going to do that is raise the (fees)," Forner said.
User fees - a flat $300 yearly - and other service fees generate nearly $4 million in additional revenues for the district.
"We reduced the tax levy by 10 percent, which will show up on next year's tax bills," Forner said. "We did a survey back in January ... we were the lowest rate in the area out of 13 communities we surveyed."
The district's operational expenses are estimated at about $2.3 million for next fiscal year. An additional $3.7 million is earmarked for needed upgrades to the roughly 15-acre, 4.5 million-gallon plant at 515 Plum St. in Lake in the Hills to meet U.S. Environmental Protection Agency requirements. It was built in the 1960s.
"We are dipping into some of our (roughly $5 million in) reserves, which we anticipated," said Forner, adding his board has not reviewed the village's report on potential cost savings through consolidation. "For the village to feel that they can do a much better job than we do as far as providing service to our customers, we don't see it."