Yorkville, Illinois - Mayor's Office

City Government

October 13, 2009 State of the City Address by Mayor Valerie Burd

The Illinois State Statutes requires a mayor of a municipality to give the City Council updates on the state of the City from “time to time.” After reading some of the recent letters to the editor in our local newspaper, and hearing some of the rumors circulating around Yorkville last week about the City’s financial situation, I think this should be one of those times.

The executive director of the Yorkville Economic Development Corp. Lynn Dubajic and I both received several calls last week from people who had been told that I was calling a special meeting to announce that the City of Yorkville is bankrupt. Let me make it perfectly clear --This rumor is totally false. I repeat. This rumor is false. The United City of Yorkville is not bankrupt. In fact we are not even in the red. We are not currently in deficit. We are not behind in our bill payments. Many municipalities are in such dire financial straits. We are not. While I wish we had a large fund balance of available cash to fall back on, we are currently meeting 100% of our financial obligations, and we will continue to do so.

Other rumors that are circulating – that Target and Kohls are closing – are also false. We should all realize that whoever began these false rumors is no friend to our city. This type of negativity actually is specifically designed to hurt the credibility and standing of the United City of Yorkville, and of my administration. It’s designed to make investors, and there are major investors currently looking at coming to Yorkville, think twice about putting their money into a project here. We all need to fight this type of negativity; we need to clip it in the bud, because in these times of economic slowdowns, we can’t let false rumors and innuendos get in the way of our economic recovery. If anyone passes on such a rumor to you, please tell them they are mistaken. Ask them to call the City and check the facts. Any resident can request a copy of our financial statements. Everything is accessible. We are not bankrupt.

What we are doing right now is looking to the future, to the end of our fiscal year next April. Our Finance Director, Susan Mika, has been keeping a close eye on the revenues coming in to our City and she is projecting the possibility that we may end up the year with a deficit of $550,000 if we don’t make adjustments now. We are very aware of the weak economy. We expected that the downturn could continue. The layoffs at Caterpillar and other companies has resulted in a 12.1% unemployment rate for Kendall County, higher than the state average of around 10%. This means that our residents have less money to spend at Yorkville stores and this translates into deceased sales tax revenues. To date, the state has only sent us three months worth of these revenues. From what we have received so far, we project that we may receive a total of $2.5 million for the year – about $100,000 less than our current budget is showing. We also know that Raging Waves Water Park had a cold and rainy summer to contend with, and ended up producing less than they expected –resulting in $200,000 less in amusement tax coming in to the City.

I have discussed the probable deficit with our department heads. They have already cut several million dollars from their budgets over the past two years. That is a fact that can be documented. They are continuing to hold the line on spending for non-essentials. In addition, we have instituted a hiring freeze. We have cut benefits. I have cut contractual workers and I have let go other employees. I don’t think we have been timid in addressing the financial situation. But more cuts are needed.

To determine where those cuts should be made, I am asking both the staff and aldermen on the city’s Administration Committee to come up with suggestions on how we can best address the projected shortfall of revenues. What we need are solid suggestions. Comments about “luxury items” and “fluff” are not productive and don’t solve the problem. We need to work together to do what is best for the city. I don’t think we should attack any suggestions. We should evaluate them all and see if they will work.

At the recent Illinois Municipal League sessions on budgeting in tough economic times, which some of us attended, they discussed the need to look for other revenue sources that would not impact our taxpayers before we cut services. Finance Director Mika has brought in an additional $60,000 this year by renegotiating administrative fees for work done for the Yorkville Bristol Sanitary District, and that will already reduce the possible deficit. Oswego has initiated an administrative towing fee of $500 for people who’s cars are towed because of illegal activities. Oswego projects this fee will bring their municipality an additional $200,000 in revenues. I am suggesting that we institute such a fee in Yorkville. A member of our Engineering staff, Jennifer Woodrick, has recently identified $450,000 in fees owed to us by the Yorkville Bristol Sanitary District. The staff is continuing to investigate to determine what other outstanding fees are owed to the City, and work to collect them.

Now, to address the $1.2 million of bad debt in our revenue fund balance. In 2007, when I became mayor, the City did not have a bad debt policy. The City continued to carry forward from year to year all money that was owed, no matter how long it had been outstanding. In July of 2008 Finance Director Mika asked the City Council to pass a Bad Debt Policy that would require any such money owed to the City for longer than 12 months be written off of our current accounts as a receivable. The Council complied, and we immediately wrote off $500,000 that was owed to us by Ocean Atlantic for the Raymond Outfall construction project. Here I’d like to add that the city had paid out the $500,000 in 2006 right out of our general fund for that part of the Raymond Outfall that was needed to hold storm water for the Raging Waves Water Park. So part of the Outfall has been built and the money was expended. The City was never repaid for the money that was spent.

What we neglected to do was write off the rest of the money outstanding from 2003-2006 which adds up to $437,147.95, almost all of it owed by developers who failed to pay their fees. From 2007 there was another $538,047.28. Out of this last amount, almost $195,000 was directly related to the landfill siting hearing and the appeal and the rest once again owed by developers. This year, we should have written off another $291,716.78, and out of this amount another $191,000 was to fight the appeal. All of these figures just recently were compiled by the City’s Community Development Department and handed over to the Finance Department, so it has only been recently that we’ve gotten a clear idea of what work was done, and what fees haven’t been paid. That problem of accounting is being addressed and the two departments will work more closely on making sure that we keep better tract of deposits before any work is ordered to be completed by outside engineering review firms. The City policy is now, and has been, that developers must pay their fees up front. That was the direction given by the City Council to the last administration, and it holds true today. Neither the aldermen nor I expect developers to be given a free ride at taxpayers’ expense.

But out of this $1.2 million, we find that almost $400,000, or one-third of the total amount, is money directly attributable to fighting the landfill appeal. Since 2007 when the City Council made its decision to vote against siting the landfill, this administration and the residents of Yorkville have had to shoulder the majority of the burden, financially and strategically, of upholding the City Council’s decision. For 2 ½ years Fox Moraine LLC has dragged the appeal process on, filing numerous delaying motions that increased the cost of our legal defense. In addition to this $400,000, the City also has had to fight off Fox Moraine’s efforts to de-annex from the City. Because of the annexation of additional property on the far southern side of the proposed landfill site after I became mayor in 2007, that request was denied by the local court, but Mr. Don Hamman is appealing that decision. He has also appealed the $50 ticket Fox Moraine was issued for rubbish on his land where he operates his farm composting. And his lawyers are fighting us in court to keep from paying $150,000 that was the cost for the last month of the first landfill hearing, something that our ordinance says he is obligated to pay.

I think it is disingenuous of anyone to say that the City of Yorkville hasn’t been hurt by this continuous drain on our finances in the middle of an economic downturn that is also draining our revenues. It doesn’t take a mental giant to figure out that it would be very beneficial to Fox Moraine LLC if the United City of Yorkville did go bankrupt. A bankrupt city could not continue to vigorously pursue multiple defenses in court. We have lost more than $800,000 from our general fund over the past two years fighting this fight. If we only cared about fiscal responsibility, if fiscal responsibility was the determining factor for making our decision two years ago, then we should have sited this landfill. It would have brought $8 million in additional revenues to our City over the past two years – money enough to take the United City of Yorkville out of reach of this recession. Money enough to pave our streets, and begin the renovation of our downtown, money enough to keep our needed employees safe from layoffs. Money enough to let us increase city services, instead of having to cut them.

But this City Council has never believed this fight was about money. For us, it has been about doing what is right for our community as a whole. As you all know, the City defeated the appeal before the Illinois Pollution Control Board. I would like to congratulate our legal team at Wildman Harrold for a job well-done, also the majority of the City Council which over the past two years has been unwavering in its support for fighting all the legal battles we have been dragged in to by Fox Moraine LLC. And I would also like to thank the Friends of Greater Yorkville, the Kendall County Board, and the Village of Plainfield for their support in defending against the appeal. We won this round. But the fight still goes on.

Now, as we continue to face revenue shortfalls, we as a City Council will have to take another long look at our finances and decide how we will deal with this legal drain on our resources. We will have to decide where we will make our newest and hopefully last cuts. We will have to find other sources of revenue. We will have to work with the Yorkville Economic Development Corp. to encourage good businesses to continue to locate here. We will have to be supportive of our current businesses and the Chamber to help protect the sales tax revenues that these businesses provide to us. We will have to rebuild our fund balance.

It’s a big task. But I am confident that next April our budget will be balanced. I would like to send this message to Fox Moraine LLC on behalf of the Council and residents of the United City of Yorkville – the City of Yorkville is not bankrupt. The rumors of our demise have been greatly exaggerated. We are still alive and kicking. We are still able to fight the fight. And we look forward to future victories.

-Mayor Valerie Burd

View the 2008 Annual Service Report, the city's Master Facilities Plan, the Facade Program, the Appearance Code and the Economic Incentive Program here.