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.”
This article appears in Jan 5-11, 2006.
