Property owners living in one of Brookfield’s special assessment districts received refund checks from the village in recent weeks for the amounts they had been overcharged on new alley construction back in 2007.
Refunds went to 17 property owners on the 4100 blocks of Raymond/Madison and the 9300 block of Ogden Avenue, who back in January 2008 had paid in full their share of the estimated cost to complete the alley.
In all, Brookfield refunded almost $14,000 to those property owners.
The property owners in that district, Special Assessment 344, who didn’t pay the entire amount upfront will receive adjustments to their annual payment schedules to account for the initial overcharge.
But the checks approved by village trustees on March 14 are just the start. In all, the village stands to refund some portion of the funds it has already collected in 19 special assessment areas, all related to alley projects completed between 2007 and 2009.
It’s unclear just how much actual cash will be refunded because a good portion of the overcharges will be reconciled as adjustments to future payments. But village records indicate the village overcharged property owners in those special assessment districts by $193,223.
According to the village’s finance director, Doug Cooper, the refunds are being paid out of its special assessment fund, which is kept separate from the village’s general operating fund. When payments need to be made from that fund, they are transferred to the general fund for disbursement.
“Hopefully, by the end of April we’ll be through everything,” said Cooper, who has begun sending letters to property owners notifying them either of a pending refund or an adjustment in their payments.
The refund/adjustment process will finally close the book on a 3-year-old investigation into the way special assessments were being administered.
In large part, those property owners can thank Steven Campbell – a major village property owner and burr under the saddle of Brookfield officials through the years. Campbell first brought the matter to the attention of village officials in March 2008.
At the time, Campbell was questioning another matter related to Special Assessment 334, where he owns property. SA 334 was created in 2006 for the construction of an alley between the 3200 blocks of Arthur/Maple.
Campbell had paid his assessment in full. But in 2008, when he talked to the contractor who performed the work, the contractor told him he hadn’t been paid yet by the village, even though the village in February 2008 knew the final cost of the work performed for SA 334.
Traditionally, a contractor who performs work for a Special Assessment in Brookfield holds the note. The work is done and then property owners pay the contractor over 10 years at 6-percent interest, using the village as the collection agency.
Campbell additionally learned that the village had made payments to a different contractor for work on SA 344, which was completed the following year. The difference, Campbell found was that the village held the note on that alley, not the contractor.
The contractor for SA 344 was paid out of the special assessment fund, which presumably held funds meant to pay the contractor for SA 334. The latter was eventually paid most of what he was owed; the village is still working out final details on remaining payments.
Explaining the late payments, Assistant Village Manager Keith Sbiral said that contractor hadn’t submitted vouchers for payment. Since that time, the village has amended the way it pays alley contractors who hold the note. They are paid on a schedule, not as the result of submitting vouchers.
In his quest to get an answer about the fate of the money he had already paid, Campbell also discovered that the village was charging property owners in the SAs more than the cost of the project. In addition to being charged the estimated cost instead of the final cost, Campbell learned that the village was charging some SAs a 5-percent premium over and above the construction estimate.
Illinois state law allows such a charge, called an “interest deficiency,” as a way for the village to protect itself against people who don’t pay their assessments, but Campbell was outraged.
“The village overbilled substantially. They knew it,” said Campbell. “They threw in the 5 percent as a capital cost, so everyone paid interest on it. The 5 percent, if you run it out 10 years, turns into 8 percent. And for what? My contention from the beginning is that the village had no right to increase the interest exposure or interest cost to the private-sector participants just because they couldn’t get their act together.”
Cooper, who began unraveling the SA issue after he was hired in January 2009, admits the village didn’t have a handle on how to administer the 19 SAs when they created them. The prior finance director, John Dolasinski, had put together detailed spreadsheets and processes (he was the one who set up the separate special assessment fund, said Cooper) for tracking estimated vs. final costs and refunds.
Dolasinski was ousted from his post in early 2006. Until Cooper’s arrival in 2009, no one knew how to handle the SAs, because the village didn’t have a full-time finance director.
“John Dolasinski was actually on top of this,” Cooper said. “From 2007 to 2008 … there were a lot of special assessments being established. They really didn’t have a full-time finance director here, and so I don’t understand if [then part-time finance advisor] Mark Tomassini understood the implications of what needed to be done.
“But there was correspondence by our attorney at the time that refunds can be made at a later date. So we were putting it off because we were putting everything financially back in place.”
Asked if the issue would have been unraveled if Campbell hadn’t complained and Cooper had not been able to sort things out, Sbiral, who was also village treasurer at the time, said yes.
“I can tell it would have gotten done eventually because I was substantially in agreement with Steve [Campbell] and so was [Village Manager] Rick [Ginex]. We knew it was an issue out there. … We felt there was some time on this.
“I don’t think there’s any big conspiracy against anything other than just, if there’s any guilt, it’s slow government work.”
Still, e-mails between Campbell and village officials show that it took a year, until after Cooper was hired, before he got any real traction on his complaints. In February 2009, Campbell quipped in an e-mail to Ginex that he would be sending a birthday card to the money he paid for the still-unreconciled SA 334.