FORESTVILLE - Shocked residents crowded into the Forestville Village Board meeting to question the proposed 445 percent increase to the tax rate.
Newly elected Mayor Kevin Johnson read a statement explaining how the village incurred the $250,000 debt for demolition of a building in 2009 and $150,000 debt for replacement of a waterline on Bennett State Road, as well as the need to replace the fire hall roof at an estimated cost of $46,000.
He said the increase in the tax rate from $5.13 to $27.97 per thousand assessed value is a worst-case scenario and the board has plans to try to mitigate this increase.
OBSERVER Photo by Nicole Gugino
Forestville resident Randall Feinen addresses the village board to ask how it expects residents to pay a 445 percent tax increase Tuesday.
He said the village plans to use cash to pay off the $150,000 bond anticipation note, which is now considered in default. He said once the village is no longer in default it can consider borrowing money to replace the roof, but it still must include the $250,000 debt in the 2014-2015 budget as part of litigation with the bank.
He said the board plans to offset the amount it will pay in cash for the waterline debt with the sale of the Arkwright springs property.
"What if your plan doesn't work and people can't pay these taxes? You are assuming that that is the tax levy you are going to get, but what if people don't pay?" resident Randall Feinen asked.
It was explained the county guarantees unpaid taxes and levies them against homeowners, which if not paid can lead to tax foreclosure of homes.
Johnson said he has been in contact with representatives at all levels of government, asking for help and is hopeful the state or county may be able to help residents by increasing the amount of time they have to pay.
"It will be a ghost town," Angelo Bittinger said.
She asked for a guarantee that this would be only a one-year hit.
Attorney Michael Sullivan said the village cannot give one, but the residents' can see that the village has kept regular municipal spending about the same as 2013-14 and there are no other "misidentified" items left on the books.
Another resident asked if this increase will affect residents' state tax rebate for staying under the tax cap. Sullivan said that will not be calculated for villages until the 2015-2016 budget year.
Clerk Jim White said the village has been warned if it does not pay the debts then there is a chance it could lose its waterline project grant and zero interest loan, leaving the village with a $6 million debt.
Resident Laurie Strong asked if anyone is being held responsible for the demolition debt. Johnson said the village is in the process of doing an investigation, but Michael Sullivan said the statute of limitations to hold the owners of the property responsible has expired.
Some residents questioned selling the springs property in the case that the new water source fails. New Trustee Gary Belote explained the village has two wells and one will operate if the other one is offline.
Eileen Eaker and other residents asked if the village can file for bankruptcy. Johnson said the village is not looking to file for bankruptcy or dissolve and the board is trying its best to make the situation better.
"In the end we will do what is best for the village. We will give it our best effort to make this less than the 445 percent," he said.
The board entered into executive session to discuss litigation and personnel. Upon exiting the board authorized White to make a cash transfer of otherwise earmarked funds to pay the $150,000 waterline debt as well as the interest on that debt and the interest on the demolition debt.
The board will meet again on April 22.