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Channahon Village Board discusses budget issues

Published: Wednesday, Feb. 26, 2014 5:30 a.m. CST

CHANNAHON – The Channahon Village Board held a special meeting Monday to discuss budget issues, including how capital expenses will be met should the revenue from the village’s sales tax rebate program be drastically cut.

Since 1999, the village has been involved in a sales tax rebate program where several businesses not totally based in Channahon have the village on record as their point of sale location to take advantage of Channahon’s lower sales tax. The program brings in an average of about $1.5 million per year to the village, but state regulations may permanently reduce that revenue.

The funds have always gone to pay for capital expenses, not operations of the village, Village President Joe Cook said. With the upcoming budget, those expenses include police vehicles, computer equipment, phone equipment, road projects and capital equipment. Other capital expenses planned, Village Administrator Joe Pena said, include a riverwalk study, tax increment financing at the Route 6 and Interstate 55 area and community signage, all totaling $487,000.

For conservative planning, Finance Director Bob Guess said the budget he is preparing assumes no rebate program income.

“That makes more practical sense,” he said.

“Plan for the worst,” Cook said. “And hope for the best.”

Cook added he is optimistic a zero rebate income will not be the case. The village has hired a lobbyist to work for it on the issue, and Cook is scheduled to make a trip to Springfield this week to talk to state senators.

Guess said road programs can be paid for from the state and village motor fuel tax funds. By 2015-’16, a Thornton’s gas station will be up and running at the Route 6 and I-55 interchange and should be adding to the revenue for road infrastructure programs.

Also, the board informally agreed to increase the amount of the 5 percent telecommunications tax on cellphones, land-line phones, Internet and email services that goes to the capital fund. Currently, 40 percent goes to the capital fund, and 60 percent goes into the general fund. Should the board officially agree to the change at a future board meeting, that revenue will be split 50-50 between the funds.

“This is one of the sources of revenue we can look to for capital,” Pena said.

“This will have some effect on operations,” Guess said. “But I don’t think it will have a drastic effect.”

Pena said the balance of the rebate fund this year will be more than $4 million.

Trustees briefly discussed setting aside that amount for defeasance and allowing it to earn interest, then issuing a check from the fund when the bond payments come due. That would protect the village, Guess said.

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