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News
Budget funds to maintain infrastructure? : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, IllinoisBudget funds to maintain infrastructure?
| Oswego Board members react differently to staff recommendation
| by John Etheredge
| 11/22/2012
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The Village of Oswego's finance director and administrator have recommended the village board begin setting aside funds to pay for infrastructure improvements to the village's water system.
But board members had opposing reactions to the recommendation during a board committee-of-the-whole meeting last week.
Mark Horton, the village's finance director, told board members that the village's water and sewer fund currently operates "just fine" and "revenues are enough for existing expenditure levels."
However, Horton said there are no funds designated for infrastructure improvements beyond $300,000 over the next five fiscal years.
"My opinion is the capital outlay is way lower than it needs to be," Horton said, "We should be spending a lot more on capital improvements on an annual basis-that is my opinion."
"On what?" asked board member Jeff Lawson.
"Infrastructure improvements. Installing new pipes," Horton said, adding, "There are programs we can put in place. (Village Public Works Director) Jerry (Weaver) has talked about a well maintenance program we could put in place. With a couple $100,000 every year we could do some preventive maintenance on the wells so we don't have to react to a (situation) where a well goes down, a pump is shot and we have to spend $300,000 all of a sudden on a pump replacements."
Horton said the village could also conduct annual checks for leaks in water-sewer lines by hiring a firm to run a camera down the lines to televise them.
"There are probably leaks out there that we don't know about, especially with the sanitary sewer lines," he noted.
Lawson noted the village's water and sewer lines can last up to 100 and 150 years and asked Horton which ones would need to be replaced.
"Whichever ones we find that need replacement," Horton said.
"I thought we do that now. Whenever the pumps break down we fix them," Lawson said, adding, "We are always going to do that."
Board member Gail Johnson compared Horton's recommendation to set aside funds for infrastructure improvements to that of a homeowner budgeting money to replace a furnace or water heater after "so many years."
"I don't think he's saying that," board member Scott Volpe said, referring to Horton. "He's talking about taking the water heater out before it breaks and putting in a new one in."
"No," Horton said, adding, "If you have a (water/sewer main) televising program in place, you find out where you have leaks and those areas you would fix. Or you would come up with a plan to fix those areas, based on how bad they are leaking."
Horton recalled that in some other communities where he has worked they would "spend as much money as we could" to have a firm come out and re-line sewer pipes to repair leaks.
"It's cheaper to reline every sewer pipe than to replace the pipes, but it all takes money," he said.
Village Administrator Steve Jones agreed that most of the village's water system infrastructure is newer.
"We wouldn't expect that to fail," Jones said.
"But you also have the older section of town. We are not doing aggressive televising. We not going in and finding where tree roots are penetrating (sewer lines)," Jones said, adding, "What he (Horton) is suggesting and what I think most towns would do is when you have a huge amount of infrastructure that is getting older and older there is some set aside that is factored into the budget. You're not pulling out 20 or 30 year old-pipe. What you're doing is setting up some reserves so that money at some certain, acceptable level is available to do those anticipated major repairs."
Volpe noted that funds for infrastructure repairs are built into the water service tap on fees it charges homebuilders. He said the village will receive $100 million in tap on fees as the community is built out.
Jones, however, said the village can't control how much it receives in tap-on fees.
Lawson said, "But the suggestion is that the current taxpayers will pay for the future taxpayers. That's a flawed philosophy because we owe them a working system with no debt. We don't owe them to save for repairs in the future. You are suggesting the current taxpayers have the responsibility to replace everything now for the future. We fix things as we go."
Jones said he and Horton are recommending the board set aside "a little bit of money-a rainy day fund" that would be protected so it could not be used to pay for other expenditures like vehicle purchases or employee health insurance.
"I guess I'm skeptical," Volpe said, adding, "Government doesn't have a good history of building up funds and staying out of them. Government tends to build up funds and then spend the money."
Lawson said up until a few years ago the village had "raided" its own water and sewer fund by placing revenues from the fund into the general fund. The end result, he said, was that the water and sewer fund was "nearly bankrupt" until the board halted the fund transfers.
Johnson said she believes the village has an obligation to maintain its infrastructure for use by future village residents.
"The people who came here early on put in the roads, paid for what we have now. It's part of living in a community," she said.
Board member Tony Giles suggested the board could set aside money it might now target for cutting in future budgets for infrastructure improvements.
"You govern how you want," Jones said, adding, "The point is you should do something. You don't have to have the whole (water and sewer) system replaced over a 20 to 30 year period."
Lawson, however, noted that "boards come and go" and "policies change."
Johnson said it sounds likes her board colleagues want to "slap a Band-Aid" on the village's infrastructure "and run."
Jones cautioned the board that by using revenues from future growth to pay for infrastructure repairs they will not be assured of having the necessary funds when they are needed.
Lawson contended the village will have the needed revenues as previous debts are paid off in the coming years.
"The cash will continue to grow. It doesn't stop. That is where you will build that up," he said.
Volpe noted the board has successfully managed to save and budget the money it needs to pay for the relocation of a village-owned water main along Ill. Route 71. The village must move the main out of the state-owned public right-of-way to allow the Illinois Department of Transportation to widen the highway from two to five lanes between U.S. Route 34 and Orchard/Minkler Road.
By saving and paying upfront for the water main project, Volpe said the village will save $1 million in interest over the next 20 years. The village, he said, will be able to use those revenues to pay for other expenses.
"Route 71 is one of those projects where we were able to plan and save ahead," he said.
Jones, however, said if the recession had taken a more of a toll on the village's budget or the village's sales tax revenues had not increased as they have in recent years the board "would not have the luxury" of being able to set aside funds for the water main project.
"We've managed to do what we've needed to do, but we're suggesting it should be a little more systematic, a little more predictable," he explained.
By setting aside funds, Jones said the board would be taking a proactive approach to maintaining its infrastructure "as opposed to hoping for the best."
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