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Thursday, Jan. 5, 2006 02:20 pm

Checks and balances

Sherman retroactively approves bond expenditures

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Village President Frank Meredith says inexperience led to an “administrative error.”
PHOTO BY R.L. NAVE
Top officials of the Village of Sherman admit that they made a mistake when they approved expenditures from a recent bond issue. On Tuesday, they attempted to rectify the error — but at least one critic is frustrated. The dispute involves $856,000 in expenditures from a recent tax-increment-financing bond approved by the village’s president, Frank Meredith. Both Meredith and village attorney Jim Kelly concede that it was a mistake for Meredith to approve the payments without the approval of the village Board of Trustees, as required by ordinance. Kelly calls it a “procedural glitch.” Meredith sings the same tune: “There was an administrative error, and we fixed it.”
The mistake, Meredith says, was the result of the 3,000-person village’s, and subsequently his, inexperience with TIF bond issues. In fact, he says, this was the first bond of its kind during his tenure as Sherman’s top elected official. However, Trustee Trevor Clatfelter wonders how Meredith, who’s been in office for almost 20 years, and Kelly, whose salary at the time was $175,000 per year, could have made such a simple administrative error. At Tuesday’s board meeting, Clatfelter was one of two trustees to oppose an ordinance submitted by Kelly that retroactively approves the procedure Meredith used to disburse funds for a new development area in the town. Clatfelter believes that Kelly’s ordinance nullifies what he says was a solid ordinance with perfect system of checks and balances. “This was a transparent document,” Clatfelter says, referring to the ordinance. The action taken on Tuesday, he argues, essentially forgives Meredith’s wrongdoing with respect to the original bond ordinance. “The one thing we’re most sure of is that the correct procedure was not followed,” Clatfelter says. In December 2000, the village created the 34.2-acre tract at the intersection of County Highway 1 and Business Route 55 known as Route 66 Crossing at Sherman. To pay for infrastructure needed to support development in the area, the village purchased bonds valued at $1.65 million. According to the bond ordinance, the village, clerk, treasurer, and board are supposed to sign off on all expenditures, which are only to be used for infrastructure improvements. During a routine annual audit this November by Springfield-based CPA firm Legg & Legg, it was found that TIF bonds, nearly half of the total, had been approved by Meredith without the appropriate countersignatures. According to auditor Bill Legg, the finding is fairly common for municipal governments, and it does not suggest any impropriety. Legg tells Illinois Times that he “gave a consideration” that the village board approve the prior disbursements. “Anyone could have given that consideration,” Legg offers. When Legg first brought the issue to the board’s attention, the TIF committee — comprising Meredith, Clatfelter, and another trustee, Kevin Schultz — agreed that the original ordinance would be followed subsequently but recommended to the full board that the expenditures not be approved retroactively. However, that changed on Tuesday, when the board indeed ratified the procedure followed with regard to processing payment requests. Aside from feeling blindsided, Clatfelter — a former budget analyst for the Illinois Senate’s appropriations committee and a current employee with a state revenue-forecasting agency — is also uncomfortable with what he sees as interference with an audit. In his opinion, Legg should have completed his audit and issued a finding outlining what was done wrong instead of giving the village an opportunity to fix its mistake. “It sets a bad precedent,” Clatfelter says. “I’m standing on principle and knowledge of how audits are supposed to work, and it concerns me that it will look like we’re cooking the books for future investors.”
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