FEDERAL INVESTIGATION: HAS THE VILLAGE MISAPPROPRIATED GRANT MONEY? PAY TO PLAY?

ILLINOIS ATTORNEY GENERAL ISSUES DETERMINATION- VILLAGE VIOLATED LAW... AGAIN!

SAUK VILLAGE | The Illinois Attorney General has once again issued a determination that the Village has violated the Freedom of Information Act.

A request through the Freedom of Information Act for documents was made to the Village on May 11, 2016 for documents pertaining to a grant the Village received from the Illinois Public Risk Fund to purchase bullet proof vests for members of the Sauk Village Police Department.  We requested “all receipts, invoices, purchase order/requisitions, communication and correspondence showing the use and expenditure of these funds from said grant”.

On June, 2, 2016, the Village finally responded and furnished a one-page accounting which appeared to be an account ledger.  The Illinois Attorney General determined that the Village violated the Act because it did not respond to the request nor did it ask for additional time to complete the request as the law states.

On July 7^th the Village submitted a response to our Request for Review to the Attorney General’s office.  The Village stated that Mohan Rao, the Village’s Finance Director, is the “record keeper for grant materials”.  In the Village’s response they provided additional information that they submitted to the Attorney General in confidence and the Attorney General therefore could not provide us with copies of that confidential “information”.

Our response to the Village at that time was that the Village did not deny they received the grant and therefore it should maintain additional records related to its receipt and expenditure.

The Illinois Attorney General’s office determined that the Village violated the Freedom of Information Act because their response was “untimely” that it did not conduct a “reasonable search” for the documents we had requested. 

The Village’s official response was that the Village Finance Director “cannot locate the records, nor the specific measures the Finance Director took to search for them.”  Additionally the Illinois Attorney General stated that the confidential correspondence with the Village Attorney “does not adequately describe the scope of the search…”.  According to the Attorney General “The records related to a State grant recently received by the Village, and it appears likely that additional records exist regarding the application, award and expenditure.”

It appears that the Village has once again "lost" pertinent records regarding the details of the grant.  Accordingly we have reported this information to higher authorities.

The Illinois Attorney General had issued a rare binding opinion ordering the Village of Sauk Village to turn over “all documents” we requested with respect to Village Clerk Debbie Williams and her daughter Rosie Williams’ “personal trip” to Washington DC, which we have referred to as the Travelgate Scandal. ***CLICK HERE TO VIEW BINDING OPINION*** The Williams duo had used the Village’s website and Village resources to solicit “donations” from Village vendors, yet the Williams duo claimed “this was a personal trip”.  Both Debbie Williams and Rosie Williams spoke at a Building One America Summit in Washington DC in July, 2013.  Village vendor Pat Couch, now a Police and Fire Commissioner was appointed shortly after the trip to the Police and Fire Pension Board which may have been a “quid pro quo” or “this for that” or more commonly referred to as “pay to play”.  After the documents were finally disclosed two years later, it revealed that Couch actually paid for the dynamic duo's, Debbie and Rosie Williams, airfare to fly to Washington DC for this “personal trip”.  Couch actually attended this conference with the Williamses.  No documents were provided showing that Debbie and Rosie Williams reimbursed Couch for her money.

The Village Administration, supported by Rosie Williams and the votes she cast, has established a pattern of blocking the public’s access to documents and overall transparency.  The Village sued the Attorney General in order to block production of the documents concerning the “Travelgate” scandal.  Hanks and the Williamses spent thousands of tax dollars in their failed attempts to block the production of these documents.  

It is only due to the persistence of information can we find the answers we seek from this administration.  The big question for Sauk Village residents is WHY? WHY CAN'T INFORMATION BE FORTHCOMING WITHOUT BEING MADE TO DO SO?

For more information on Travelgate ***CLICK HERE***

SAUK VILLAGE FINANCIAL MESS - No Documentation Needed!

This is the sixth in a series of revelations of the 2014-15 Audit Report.  The Village was delinquent in filing their audit with the Illinois Comptroller (due December 26, 2015).  The Audit report (see attached link at the end of this report) reveals the status quo with the Village finances continues with 3 years into David Hanks’ Administration.

SAUK VILLAGE |  Three plus year into the Administration of David Hanks and we still see a reckless pattern of financial mismanagement at Village Hall. 

Hanks has said repeatedly over the course of the last few years that the village has “had to borrow $500,000 each year from the water fund” in order to make payroll.  Well, according to statements made by Village Finance Director Mohan Rao the Hanks Administrations has had to borrow some $900,000 from the water fund and $200,000 from the Noise Mitigation Fund during this most recent fiscal year.  There has never been a vote by the Village Board of Trustees to borrow such money from the water fund, as has been the case during previous administrations.  The Village actually received more money from the State of Illinois than Hanks put into his budget.  Basically, Hanks is using “fuzzy math” when it comes to his budget mismanagement and when it comes to taking money from the water fund.

The following is an excerpt from the Village’s most recent Audit Report Management letter:

11.       Documentation of Employees Salaries/Hourly Rate (Repeated from Prior Year)

We noted certain instances where employees’ personnel files did not contain formal documentation of the current rate of pay.  We recommend that formal documentation of all such changes be included in the personnel file, and authorized by the departmental supervisor or another appropriate individual.

(Editorial Note: Seems simple enough right?  So why is this repeated from the prior year?)

12.       Controls over Cash Receipts (Repeated from Prior Year)

The Finance Director (Mohan Rao) often records large cash receipts via a manual journal entry, and deposits the receipt to the bank, in order to ensure that the receipt is deposited an expeditiously as possible.  However, this result in a deviation from standard Village procedures.  We recommend that all cash receipts, and other transactions, be processed under the Village’s existing internal controls on a timely basis.

13.       Capital Asset Disposals (Repeated from Prior Year)

The Village recorded significant capital asset additions in the current year, but did not record any disposal in either the current year or the preceding fiscal period.  The Village should consider whether, based on the nature of additions, disposals are occurring and not being recorded.  Additionally, the Village should carefully review its capital asset details to identify potential items that are no longer owned, and/or no longer in use

(Editorial Note:  So how do they know if assets belonging to the village aren’t disappearing?)

An expert on Illinois Municipal Finance, intimately familiar with Sauk Village’s financial history reviewed the Village’s audit and management letter and stated the following:   “I don't believe any of these are just normal issues.  In a well run environment, none of these issues should occur.  There should always be a system of "double-check" in order to eliminate any possibility of wrongdoing.  We have many of these safeguards in place to prevent fraud and provide transparency with taxpayer’s money.   What I don't get is the lack of attention being paid to account receivables.  What exactly does everyone working at Village Hall do?  Why is it that the Finance Director has no backup from existing staff? What does this so called Village Administrator or the Mayor do? (by the way the Finance Director  seems to have a lot of authority according to this report)?  This report is pathetic!”

SAUK VILLAGE FINANCIAL MESS - Why follow the law, who is going to question them?

This is the fourth in a series of revelations of the 2014-15 Audit Report.  The Village was delinquent in filing their audit with the Illinois Comptroller (due December 26, 2015).  The Audit report (see attached link at the end of this report) reveals the status quo with the Village finances continues with 3 years into David Hanks’ Administration.

SAUK VILLAGE |  Why does David Hanks have Village Administrator J.W. Fairman poking around in things better left to professionals such as the Uniform Crime Reporting instead of the Village’s financial mess?  Mayor David Hanks and his administration have failed to address over 19 serious issues with the Village’s audit, most of which are repeated from the prior year according to the audit report.

None of these 19 items has come out publicly, nor have they been discussed by Hanks with his Village Board. 

The following are a few items that were found in the Village’s annual audit report Management Letter:

3.       Tax Increment Financing Fund (Repeat from Prior Year)

The Village presents certain deposits, held with the trustee/paying agent (which is Amalgamated Bank) for the payment of principal and interest maturities on the Village’s tax increment financing (TIF) and other general obligation bonds, and transactions associated with those accounts, within the Debt Service Fund.  As a result, it is unclear to the users of the Village’s financial statement the extent of the balances and transactions associated with each of the Village’s TIF Districts.  We recommend that the Village consider recording all such activity in funds that are specific to each TIF district.

4.       Accounts Payable Detail

The Village lacks an adequate detail of accounts payable that reconciles to the general ledger balances by fund.  Various non-audit services were required to assist the Village in preparing a detail that reconciled to the general ledger.  We recommend that the Village consult with its account software support firm to ensure that a detailed accounts payable report, by invoice, is available.  We also recommend that the Finance Director (Mohan Rao) review invoice posting dates to ensure that invoices are posted to the correct accounting period.

     5.       Interfund Advances and Transfers (Repeated from Prior Year)
 

Various interfund advances and transfers have been made, either without the formal authorization of the Board of Trustees, or in excess of Board-approved budgeted amounts.  We recommend that all interfund advances and transfers be brought to the Board of Trustees for formal approval, especially in situations where actual amounts exceed budget.

Illinois law states:  65 ILCS 5/8-1-3.1 “Borrowing from financial institutions. The corporate authorities may borrow money for corporate purposes from one fund for the use of another fund providing such borrowing shall be repaid within the current fiscal year.”

Trustee Derrick Burgess during fiscal year 2014-15 was the only Village Trustee that demanded that the Village Board vote on such transfer of funds.  Hanks and his allied Trustees have taken on a practice of merely giving “consensus” which is not a formal process.  Village Trustees Burgess, Cecial Tates and Kelvin Jones have all demanded that such transfers take place with a public vote.  “Taxpayers have a right to know how elected officials are spending their money” Burgess said.

“When this administration ‘borrows’ money from the water fund or from other funds, there has not been a public vote.  This has not taken place during this last fiscal year.  This not only violates Illinois law (65 ILCS 5/8-1-3.1) but it circumvents the authority of the Village Board” Tates said.

An expert on Illinois Municipal Finance, intimately familiar with Sauk Village’s financial history reviewed the Village’s audit and management letter and stated the following:   “I don't believe any of these are just normal issues.  In a well run environment, none of these issues should occur.  There should always be a system of "double-check" in order to eliminate any possibility of wrongdoing.  We have many of these safeguards in place to prevent fraud and provide transparency with taxpayer’s money.   What I don't get is the lack of attention being paid to account receivables.  What exactly does everyone working at Village Hall do?  Why is it that the Finance Director has no backup from existing staff? What does this so called Village Administrator or the Mayor do? (by the way the Finance Director  seems to have a lot of authority according to this report)?  This report is pathetic!”

SAUK VILLAGE FINANCIAL MESS - No Pride, No Progress!

This is the third in a series of revelations of the 2014-15 Audit Report.  The Village was delinquent in filing their audit with the Illinois Comptroller (due December 26, 2015).  The Audit report (see attached link at the end of this report) reveals the status quo with the Village finances continues with 3 years into David Hanks’ Administration.

SAUK VILLAGE |  Pride and Progress may be the Village’s motto but when it comes to the finances of Sauk Village, there’s not much to be proud of nor clearly has there been any progress.   Mayor David Hanks and his administration have failed to address over 19 serious issues with the Village’s audit, most of which are repeated from the prior year according to the audit report. 

The following are a few items that were found in the Village’s annual audit report:

3.       Journal Entries (Repeated from Prior Year)

The Finance Director (Mohan Rao) initiates and records substantially all manual journal entries, without formal independent review.  This lack of review increases the risk that fraudulent financial reporting, or a misappropriation, could occur and remain undetected.  Although the Board of Trustees reviews the monthly financial data, we recommend that another individual with financial expertise and knowledge of the Village’s chart of accounts review and initiate each manual adjustment that is identified and posted by the Finance Director.

4.       Wire Transfers (Repeated from Prior Year)

The Finance Director (Mohan Rao) initiates and records substantially all wire transfers, without formal independent review.  This lack of review increases the risk that a misappropriation of Village funds could occur and remain undetected.  We recommend that another individual with financial expertise review and initial each wire transfer advice.  Additionally, automatic notification should be sent by the bank to a responsible individual other than the Finance Director.

5.       Working Cash Fund (Repeated from Prior Year)

The Working Cash Fund has made interfund loans to the General Fund, and those loans have not been repaid in accordance with State Statutes.  Under 65 ILCS 5/8-7, the Village is permitted to transfer all or part of the Working Cash Fund to the General Fund in anticipation of the collection of taxes levied for general or special corporate purposes; however, the Working Cash Fund is to be reimbursed within a certain period of time as specified in the Statutes.  The statutes further provide for the abolishment of the Working Cash Fund by resolution of the Village Board, whereupon the Fund may be transferred to the General Fund, at the end of the fiscal year; however, a municipality that has abolished the working cash fund may not establish another working cash fund for four years, after the date the fund was abolished.  Additionally, any general obligation bonds that were previously issued for working cash purposes must be retired before a municipality may establish a new working cash fund.

Presently, the Village is recording property taxes, levied for purposes of payment of principal and interest on the Working Cash Bonds, to the Working Cash Fund, and in turn making a transfer to the Debt Service Fund.  We recommend that the Village set up transactions to be recorded in the proper fund. 

Nothing has been done to correct these Material Weakness from the prior year’s audit report, and we see what the lack of oversight of taxpayers’ dollars can clearly result in another scandal just like with the Village Treasurer.

An expert on Illinois Municipal Finance, intimately familiar with Sauk Village’s financial history reviewed the Village’s audit and management letter and stated the following:   “I don't believe any of these are just normal issues.  In a well run environment, none of these issues should occur.  There should always be a system of "double-check" in order to eliminate any possibility of wrongdoing.  We have many of these safeguards in place to prevent fraud and provide transparency with taxpayer’s money.   What I don't get is the lack of attention being paid to account receivables.  What exactly does everyone working at Village Hall do?  Why is it that the Finance Director has no backup from existing staff? What does this so called Village Administrator or the Mayor do? (by the way the Finance Director  seems to have a lot of authority according to this report)?  This report is pathetic!”

HANKS SHORT $457,000 IN UNBALANCED BUDGET

by Joseph Wiszowaty
SAUK VILLAGE | Finance Director Mohan Roa delivered the bad news Tuesday night following questions from Trustee Derrick Burgess.  The Village is short $457,000 to cover bond payments due and now Mayor David Hanks' administration is calling for borrowing from other funds, funds which are dedicated to other village expenses, in order to make the payments.  

Trustee Derrick Burgess said that this should have been foreseen and he called this out during the budget process in July and action should have been taken then.  Burgess presented the Village Board with a 21 page analysis during the budget hearing which Hanks scheduled a special meeting of the Village Board so he could dissect Burgess' analysis in minutia.  Hanks accused Burgess of offering "zero solutions" in his budget analysis.  "There are five other Trustees and none of them have offered solutions or analysis of their own, yet he (Hanks) didn't call out the rest of his board.  That's politics." Burgess said.  "I'm but one vote and he's got his five votes locked up on the Village Board" Burgess said.  "I offered an analysis of his budget proposal in July, nobody but me asked any questions of any substance during that time" Burgess said.

The Board will now hold a "special meeting" Tuesday, November 4th in order to play the musical shell game of "borrowing" special revenue funds to pay the bond payments due for the Village Hall, 9-1-1 equipment and Fire Equipment purchased. 

Burgess also called to the Board's attention to the fact that the Village will now exceed the budgeted amount in overtime.  Burgess brought this to the boards attention during the Budget hearings in July stating then this was budgeted way too thinly by Hanks.  None the less, the Village Board approved what Hanks called a "balanced budget" Burgess was the only NO vote!

Hanks sarcastically and arrogantly shot back that the Village Board has always had to borrow $500,000 from the water fund in order to pay its bills each year. 

Following the meeting Burgess pointed out that Hanks already had taken $300,000 from the water fund, borrowed some $29,600 from the water and CN noise mitigation fund to cover grass mowing and now is going to borrower $457,000 more.  "That's not $500,000, and we still have about 3 months of bills and payroll" Burgess said following the meeting.  "Just because it was past practice doesn't make it right.  Look at the mess we've been in because of past practice" Burgess said. 

"I want to see a plan from this administration on November 4th with respect to this money" Burgess said.  "They can't say they didn't see this coming.  I did, but I thought it would be in November.  I guess it came a few days early" Burgess said.

Burgess said that there was a $1.6 million deficit in the General Fund going into this fiscal year which began May 1st, and he predicts that will swell to over $2.5 million or more.  Hanks' budget called for no increase in the General Fund deficit, in fact he called for it to be reduced during his review of Burgess budget analysis.

HOUSE FIRE SHOULD BE A WAKE UP CALL- WATERGATE SCANDAL GROWS

Opinion Editorial
Joseph Wiszowaty

The Watergate Scandal just got a little worse for the administration of David Hanks.  A few weeks ago it was discovered that Hanks has been siphoning money out of the Village’s water fund to pay for grass mowing in violation of 65 ILCS 5/11-129-11 which states “The fund shall be used only for the purpose of paying the cost of operating and maintaining the water-supply system”.  Village Trustee Rosie Williams tried to justify this action by stating it was “past practice”.  Just because it was past practice doesn’t make it right.... OR LEGAL!

Housing Commission Gary Holcomb, who has published a private residents state identification card and her son’s Social Security card has been running this grass mowing operation and was trying to save face with his contractors apparently went to David Hanks begging for help with getting these folks paid before the Independence Day parade.  We have requested all of the information about this Grant through the Freedom of Information Act and will publish this as soon as we get it.

Yesterday, a garage fire in the Carlisle Estates subdivision  near US 30 and Torrence Avenue found the Fire Departments scrabbling to find a working fire hydrant.   Only one out of four fire hydrants worked on Poplar Avenue according to an eye witness. Fire Fighters were linking hose together to reach far enough to the next fire hydrant which also did not work!  Residents in the area are now worried and are furious that Mayor Hanks has already budgeted $360,000 from the water fund to balance his controversial 2014-15 budget which was passed nearly 2 months late and at the 11^th hour.

Trustee Derrick Burgess questioned if it were legal to take $360,000 out of the water fund and put it into the general fund when state law, specifically, 65 ILCS 5/11-129-11 states the Village cannot.  “The fund shall be used only for the purpose of paying the cost of operating and maintaining the water-supply system”.  Finance Director Mohan Rao said “we can do it...”.  Sure he wouldn’t be the one going to jail for the action, it would be the 5 Bobbleheads going to jail for violating the law!

One further thing that was discovered was that two administrative employees are paid exclusively from the Village’s water and sewer fund.  6 public works employees are paid exclusively from the water fund and 4 exclusively from the sewer fund, while the director of Public Works is paid 50/50 from the water and sewer funds.   Employees who are paid “exclusively” must work exclusively for those specific entities according to 65 ILCS 5/11-129-11.  Apparently the Boobleheads and his disHonor the Mayor didn’t read that law.

Also, let’s take a history lesson which goes back to 1986 during the controversy of Nancy McConathy.  McConathy filed a lawsuit which was settled where the Village of Sauk Village pledged NEVER to pay employees out of the water fund who were not working for the water department.  I believe that what is going on violates the terms of the settlement agreement and 65 ILCS 5/11-129-11 as all of these employees are not working “exclusively” for the water or sewer departments.  They are performing snow plowing, which is a Street Department expense, mowing grass which is not appropriate to be paid from the water or sewer funds, picking up trash, moving picnic tables, and doing other non water or sewer related functions.

It’s time for folks to start asking this Administration the “tough questions” and holding his hands to the fire!  He’s spending your money like a fool refusing to make those “tough decisions” he said he was going to back in November, 2012.

5 to 1 Village Board approves Hanks' Budget

By Joseph Wiszowaty
SAUK VILLAGE |  It took David Hanks 4 hours to go through his speed meeting to discuss the 2014-15 budget on June 30th with the Trustees, it took him 2 ½ hours to give his opinion on nearly every word presented to him in Trustee Derrick Burgess’ analysis of his budget Thursday night.

Hanks called the special meeting so he could rebut and nitpick the analysis interjecting his opinion on the matter declaring the numbers “skewed” but not offering any new facts to refute Burgess analysis. 

Hanks said, looking to Finance Director Mohan Rao for approval as Rao shook his head, that his budget follows Government Accounting Standards Board (GASB) principals and not Generally Accepted Account Principals(GAAP).  (EDITORIAL NOTE: GASB is the source of GAAP used by State and local governments in the United States) Hanks didn’t discuss the differences, if any, between the two at his meeting and some Trustees and Hanks supporters thought that was good point and made sense and bobbled their heads.  (Editorial note:  comparing GASB and GAAP is like referring to a Cop as a “police officer” and “law enforcement officer”... Now if the Village actually followed GASB that would be something!)

Hanks said that Burgess offered no solutions in his analysis, however, throughout Burgess analysis he states the Village Board needs to work collaboratively on long term solutions to these problems.  Burgess said he is just one person and there are five other Trustees and asked where was their analysis to discuss at the meeting? 

Hanks asked why none of Burgess’ concerns were brought up during the June 30^th budget meeting?   Burgess said that he was given Hanks budget on the same day of the budget meeting and had not had a chance to go through the information.

Burgess said after an hour into Hanks parsing each word in the analysis with some residents nodding off “why not just take your vote on this budget, you have no intention of making any changes.  You know you’re not going to make any changes so take the vote let’s move on” Burgess said.  Hanks argued that he wanted to meet with Burgess on Monday but Burgess countered he asked to meet with him and Mohan Rao Wednesday, Thursday, Friday or Saturday so that anything we discussed could be brought to the boards attention.  Burgess said meeting at 3:30pm on Monday didn’t afford Hanks any opportunity to resolve any issues before a vote on Tuesday.

When discussion of the now controversial grass cutting grant that the Village’s Housing Commission allegedly received, Hanks said that “it’s not the village’s grant it’s the housing commissions”.  The Village Trustees voted to payout 14 individuals on Tuesday $7,660 of village money.  Burgess said none of this was included in the budget.  Hanks didn’t seem to care saying it was the “Housing Authority’s grant”.  (Editorial note:  The Village of Sauk Village does not have a “Housing Authority” rather a Housing Commission which is a commission of the Village not a separate legal entity permitted to contract services)

After Hanks gave his opinion on Burgess’ analysis for 2 ½ hours he called for the vote on the budget.  Trustees Rosie Williams, Edward Myers,  John Poskins, Lynda Washington and Jeff Morden all voted yes while only Village Trustee Burgess voted no.

Burgess said after the meeting declared the budget “unbalanced” and arbitrarily taking water and sewer money to pay for general fund services.  Burgess cited Illinois law stating that water funds should only be used for the purpose of paying the costs of the water system not snow plowing, not police protection, not for streets, only for water fund services. 

“The Mayor's intentions of pontificating on my budget comments and concerns were not to help the residents of Sauk Village, but to further his politics. While his efforts are focused on his political ambitions, I will continue to focus on the matters that affect the residents of Sauk Village” Burgess said.

Trustee Lynda Washington thought the dialogue was good, but none of the other Trustees raised any questions during the 2 ½ hour long meeting.

(Editorial Note:  Trustee Burgess was citing 65 ILCS 5/11-129-11. "All revenue derived from the operation of a water-supply system, improvement or extension constructed or acquired under Section 11-129-9 shall be set aside as collected and deposited in a special fund designated as a municipal water fund for the particular locality. The fund shall be used only for the purpose of paying the cost of operating and maintaining the water-supply system, improvement or extension, providing an adequate depreciation fund, and paying the principal and interest on the bonds issued by the municipality under Section 11-129-9 for the purpose of constructing or acquiring the system, improvement or extension.”)

HANKS PLANS BORROWING TO BALANCE BUDGET

By Joseph Wiszowaty
SAUK VILLAGE |  Just two weeks ago, Mayor David Hanks recommended that the village board borrow $449,206 from the Village’s water fund, a dedicated noise mitigation fund and funds which were from the Cell Tower agreement so it could pay its debt service on the Village Hall and other obligations.  The Village voted at a special meeting to replace the money with the property tax installment by the end of March, 2014.

At yet another “special meeting”, Hanks proposed that the Village take out a $500,000 line of credit so that it can make payroll when funds are low again.   Hanks said that Village Trustee Lynda Washington-House was the only Trustee who responded to his call for suggestions on how the village should handle the situation.  House’s response to Hanks was asking “what were the past practices”.  Hanks said that in 2007, 2008 and 2009 the Village borrowed the money and paid it back when funds came in.  This time, Hanks is not suggesting that when the money is used that it get paid back all at once.  Hanks suggested the village could “make payments” over time.

The Village was facing a financial shortfall for the payroll for this Friday, November 27^th, however money from the insurance carrier for the Sandy Cosey settlement and the special police detail paid by CN Railroad helped make up the short fall according to Mohan Roa Finance Director.

Hanks suggested that the Village was going to have to make budget cuts in the next budget cycle.  “This board is going to have to make some tough decisions”.  “We’re going to have to tighten our belts” Hanks said also stating that the Village has “cut overtime”.  Village Trustee Rosie Williams suggested raising property taxes to close the budget gap that is opening wider as opposed to making cuts to the budget.  The Village faces an inter-fund debt from the General Fund of more than $2.1 million as a result of the most recent borrowing. 

Village Trustee Derrick Burgess questioned why there was no maximum rate of interest that could be sought for the Line of Credit worded in the ordinance.  Village Attorney Michael McGrath suggested that the ordinance be amended to include language saying that the maximum interest rate “will not exceed 7%”.

The Ordinance to authorize Hanks to seek a line of credit was approved by a 5 to 1 vote with only Trustee Burgess voting no.  “I don’t think borrowing more money is the answer to the Village’s problems.  I’m waiting to see what his (Hanks’) plan is moving forward” Burgess said after the meeting.  “I’m only one person and one vote on this Village Board” Burgess said.



Original material copyright 2013 Sauk Villager News; all rights reserved. 

David Hanks, Mayor

VILLAGE FALLS SHORT ON CASH - BORROWING FROM PETER TO PAY PAUL

By Joseph Wiszowaty

SAUK VILLAGE | The Village is once again coming up short and cannot pay the debt on the Village Hall and two other bond issues which were for the Village's 9-1-1 Center and a Fire Truck. The 2007 series A-B and C Bonds are considered “Alternate Revenue Bonds” and were to be paid back by monies other than property taxes which hasn’t worked out too well for the Village since 2011.  The Village Board was scheduled to vote on moving funds around in order to pay the debt service on the bonds, however, the Village Clerk Debbie Williams forgot to put the Resolution on Tuesday’s agenda.  Now the Village Board will hold a special meeting in order to vote on the resolution this Thursday.

 

 

“As you all know we do not have enough money in (the) General Fund to cover debt services for the 2007 A Bonds (Editor Note: 2007A Bond is for the new Village Hall owing about $4.8 million still according to the 2011 Audit). The total amount due is about $685,000. Of the $685,000 we have paid about $450,000. And for the 2007 C Bond (Editor Note: 2007C Bond was for Fire Equipment owing $1.087,186 per the 2011 Audit) for the Fire Truck we owe another $27,000 (this year). In essences I’m asking for permission to move funds from Canadian National Noise Reduction Fund in the amount of $236,000; $47,000 from the Cell Tower Fund and from the Water and Sewer Fund of $166,206. The Debt Service is due on December 1^st but the check needs to go out no later than November 15^thso it can reach Amalgamated Bank” Mohan Rao told the Village Board.

 

 

Mayor David Hanks said that the Village should be able to pay back all of these funds with the next installment of property tax revenues before the end of the 1^st quarter of 2014. Hanks did not indicate what services the Village would have to cut in order to make up the $449,206 deficit this will create for this fiscal year. The General Fund is already in deficit to other funds in excess of $1.68 million according to the Village most recently released audit report. This now puts the General Fund deeper into deficit to other funds to the tune of $2,129,312 according to Village financial records.

 

 



Mayor Hanks reiterated what the Resolution sets out. “So we know where the money is being spent. There are three areas the money is being spent. You have debt services (Editor Note: this would be the new Village Hall), you have the fire equipment bond and telecommunication bond. Mr. Rao will update us as funds get moved back” Hanks said.

Inaction Costing Taxpayers... Every Day!

OP ED
by Joseph Wiszowaty

SAUK VILLAGE |  Well October 31st came and went without much fanfare and a promise from the Finance Director Mohan Rao that the Village's 2010-11 Audit Report would be completed. 

The Village Board, and residents, were promised that the Audit would be complete by this past Thursday, yet nothing has been presented.  This Tuesday, on the Agenda we see that Mr. Mohan Rao will give "an update" on the Audit.

The Village has not completed and is delinquent in filing the 2010-2011; 2011-2012 and the truncated 2012-2013 fiscal years.  The village is receiving fines from the Illinois Comptrollers office for not having filed their financial reports.  (**CLICK HERE*** to view FOIA from the Comptroller's office) Thus far, the fines are up to about $16,000 and increase each day by about $100.00.

The Village is trying to appeal the fine, however, has not filed reports with the Comptroller and is unlikely to receive any consideration until the reports are filed. 

What is also costing taxpayers money is the fact that the Village has no bond rating. Standard and Poors, who provides municipal bond ratings based on financial soundness in their financial reports, suspended the Village's Bond rating indefinitely in 2011.  The Village has been trying to obtain a low-interest loan since before the April election from the State of Illinois, however, has run into some snags because it cannot provide the State with financial data.  Hanks hired a $36,000 per year lobbyist to help the village "get money", maybe he can find out why the Village hasn't gotten the loan yet?  Or maybe you already know and just don't want the public to know!  Oh I see another FOIA request in your future!

The Village changed audit firms for the 2010-11 audit because McGladry and Pullen had taken over a year to complete the 2009-10 audit.  The new audit firm, is taking a similar amount of time in completing their report and no explanation has been given by the administration.

With nearly 1 year under this administration, there has yet to be an audit report completed.  The same argument was hurled at the previous administration of Lewis Towers who took three years to complete an audit with massive turnover in the Village's administration during his brief tenure.  There has been no turnover in the last year, and the results have been the same thus far, which should be unacceptable by any taxpayer!

No questions from the "Bobble head Board of Trustees" who simply go along with the program!  There is less discussion during Village Board meetings and more being done in the back room which leaves the public not in the know and ignorant as to what is coming down the pike.

This is the worst Village Board I have ever seen in the history of Sauk Village!  At least during the "reign of terror" of Lewis Towers the discussion were PUBLIC and the good bad and ugly were discussed publicly.  Now I'm certainly not suggesting that was professional, but it was David Hanks who led the charge and who was called Lewis Towers greatest antagonist!  Where is that same level of desire for PUBLIC DISCUSSION!

So a group of some 14 people are running Sauk Village today leaving out the other 10,500 people and the "Bobble head Board" says "AMEN"!  Taxpayers should be furious, this is not acceptable from an Administration who promised that the job would get done!  Well we're still waiting, this is making the Village look bad, one should not accept mediocrity!

David "Forward Motions" Hanks