Spend money to get money?

By on November 6, 2010

3-2 vote for allocation, loan of bond proceeds
by Lynn Meredith
MAPLEPARK—With $16.8 million in Recovery Zone Economic Development bonds to be issued for economic development projects to Kane County, Maple Park is eager to obtain funds to pay for its water main replacement project.

The project will increase the flow of water for the Fire Department and residents. It will also replace pipe that would provide water capacity for future development.

But the money doesn’t come without strings.

For a $300,000 project, Kane County will give Maple Park $100,000, but the village must figure out where to come up with the remaining $200,000.

For Trustee Mark Delaney, that seems like an unreasonable request.

“At this point in time, I don’t think we can afford this. We have to put out $300,000 and then have to ask to get reimbursed. We have to spend $300,000 and hope to get $200,000. I don’t know why that’s a requirement,” Delaney said.

Suzanne Fahnestock said that while the village asked for the $300,000, the county is not saying that Maple Park spend that amount.

“I hate to see us miss this opportunity. We have the opportunity to fix something,” Fahnestock said.

Village Engineer Jeremy Lin said that that there is no formula for what the county expects. But roughly, the county will give 33 percent, the village gives 33 percent and the village has to find the other 33 percent.

The Recovery Zone bond program is there to help. The village can opt to take out a loan from the program to finance the $200,000.

“At 3 percent, that’s a really reasonable interest rate. Any improvement to the village is a great improvement,” Fahnestock said.

The village has already budgeted for the first $100,000 with the money in its Water Improvement Fund. Where to get the other $100,000 is in dispute.

“It’s frustrating that there’s no formula or rules,” Nick Moisa said. “We either have to reduce our scope or get a loan. We’re trying to protect a really limited budget.”

But Trustee Terry Borg said that the village has the first $100,000 and can take out a loan for the second $100,000 from the American Recovery and Reinvestment Tax Act of 2009.

“We have the money to cover the bills. Without some kind of action, we’re going to muddle around for another 10 years. We planned for it. The money is definitely there,” he said.

Debra Armstrong, Terry Borg and Suzanne Fahnestock voted to approve the agreement between Kane County and Maple Park for the allocation and loan of bond proceeds. Nick Moisa and Mark Delaney opposed the motion.