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Lake Zurich rate hike reveals unaccounted for $2.5M

Updated: March 10, 2013 6:44AM

LAKE ZURICH — While discussing a proposal to increase water and sewer rates, Lake Zurich officials revealed the village’s water and sewer fund could be missing about $2.5 million in reserves.

The Village Board ultimately approved the combined rate increases — 7.4 percent in 2013 and 8 percent in 2014 — but residents who spoke up Monday were more bothered by the notion that village officials aren’t sure what happened with $2.5 million.

Finance Director Jodie Andrew recommended that trustees approve the increase. She said the measure was imperative so the water fund could support significant repairs and maintenance to the service’s infrastructure.

Without the revenue boost, Andrew explained that the fund would have a negative working capital balance at the end of fiscal year 2013 despite a $60,000 surplus left after the summer drought. She said the $60,000 surplus, however, isn’t enough to cover the fund’s $216,000 deficit from fiscal year 2012.

Like the residents in attendance, Trustees Rich Sustich and Tom Poynton voiced their confusion about the nearly $3 million in question.

“When we adopted 2012 budget, we had data relative to the 2010 actual, and within the data for the water fund itself, we had an initial working capital of $2.58 million, and an ending working capital of 2.34 million,” Sustich said.

Working to find an answer, Sustich concluded that the discrepancy may have been due to an accounting error, not misspending.

Poynton also addressed the matter, suggesting that the water and sewer fund problem may have been brought on by the former board and finance director’s decisions to transfer $500,000 from the water and sewer fund into the general fund a number of times.

“None of those questions have been fully explained to us,” Poynton said. “If it was simply a clerical error, then man ... we apologize for the clerical error, but that was way before any of us were on the board.”

Andrew said that a transfer from the water and sewer fund to another account wouldn’t be uncommon. She pointed out that she would not have condoned flat transfers without having a specific reason for doing it.

The approved rate increases will raise the amount an average two-person household would pay per month by about $4.30 in fiscal year 2014, if they use about 5,000 gallons of water. An average four-person household using 8,000 gallons would pay an extra $6.88 per month.

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