Lake in the Hills’ first marijuana dispensary perhaps way to make up for COVID-19 revenue shortfalls, officials say

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Lake in the Hills Village trustees and other staff have discussed allowing for the village’s first marijuana dispensary as a way to increase revenue long term to account for a projected $13 million shortfall over the next five years.

The idea of bringing a dispensary to Lake in the Hills has gained the support of the majority of trustees in the past, Village Administrator Fred Mullard said Wednesday. Now, the economic fallout from COVID-19 has brought the prospect back into the minds of some village officials.

"There have been cannibis dispensaries that have considered locating within the village," Mullard said. "That will be another potential revenue source as they have a separate tax on those that would come directly to the village."

A Sept. 22 presentation of the village’s five-year budget projection predicted a $13 million revenue shortfall over the next five years if the current economic climate remains the same, according to the meeting’s minutes.

The projection, given by Mullard and interim Finance Director Wayde Frerichs, used "prudent forecasting" to give trustees a look into the "worst-case scenario" of the virus’ long-term impact on the village’s revenue streams, Mullard said.

Even though the progression of COVID-19 vaccine trials suggests that a vaccine will likely be available to the public sometime next year, Village Trustee and current Budget Officer Ray Bogdanowski said he thinks this more cautious approach to budgeting makes a lot of sense right now.

"We don’t know to what extent the [economic] recovery is going to be," he said in an interview Wednesday. "So when they put the numbers together, they said, ‘I don’t think we can come back here and just assume that that we’re going to be back to normal in 2021.’"

The odds that the village will actually experience a $13 million loss in revenue over five years is "very unlikely," but the projection highlighted the need to begin considering how village revenue can be increased without raising taxes, Mullard said.

When the state releases its next round of dispensary licenses, making moves to bring a marijuana shop to Lake in the Hills would be an effective way to increase revenue, Bogdanowski said.

At the Sept. 22 meeting, village Trustee Bill Dustin suggested the village "aggressively pursue" more business development along Route 47 and Route 31 in order to make up for lost revenue over the next few years, according to the minutes.

Another idea, offered by Mullard, was to apply for Federal Access Route grants to cover the cost of the village’s road resurfacing or to postpone resurfacing by a year, which would save approximately $100,000.

While it is important to pursue all avenues to ensure long-term financial stability, Bogdanowski said the village has enough reserve funds to accommodate a certain amount of shortfalls without having to increase revenue.

An ordinance stipulates that the village must maintain a reserve fund balance amounting to 25% of its total expenditures to be adequately prepared for a rainy day, Bogdanowski said. By his estimations, the village currently has around 50% in reserve funds, he said.

“It would behold us as a village officials to look at that before we start talking about any revenue increases as it relates to increased taxes or increasing the tax levy or anything like that,” he said.

While Lake in the Hills has seen a significant decrease in sales tax revenue as well as its portion of the state’s income tax this year, the village has been able to save on some costs with schools and the village-run daycare center being closed, according to Bogdanowski and Mullard.

Overall, Bogdanowski said he feels the village is fairly well situated for whatever the next five years bring, but he is waiting on the finance department to present the budget to say for certain.

The budget will be presented at the Board of Trustees meeting planned for Thursday, Nov. 12, and it will be approved sometime in December, he said.

Region: NW Herald,Local,Region: Suburbs

via Northwest Herald https://ift.tt/2Dgcz6j

October 8, 2020 at 05:22AM

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