SSA Questions & Answers

MPOA Special Report to Owners

On March 18, 2008, the McHenry County Board,, by a 16 to 7 margin, passed a critical resolution supporting the creation of a Wonder Lake Special Service Area (SSA) through the Village of Wonder Lake (VWL).  Special thanks go out to all County Board members, including Sandra Fay Salgado and Sue Draffkorn (District 4), and Randy Donley, Mary McCann, and Daniel Ryan (District 6), who recognized the urgent need to pursue lake restoration, and voted in support of this action.

The next step is for the Village to pass an ordinance establishing a SSA hearing date and notifying all owners of its date, time, and location.   Once the SSA hearing has been adjourned, there will be a 60 day period in which anyone opposed to the SSA can gather signatures on a petition.  If, within those 60 days, properly executed petitions containing the signatures of 51% of property owners and 51% of registered voters within the proposed SSA are submitted to the VWL and verified, the SSA process is stopped, and can only be restarted after two years have passed.  If the opposition petitions fail, then the VWL can pass an ordinance establishing the SSA.  

To help keep you informed on the process and the issues, we are sending you this newsletter. 

Lake Facts

The MPOA By-Laws clearly state that the purpose of the MPOA is “To conduct and promote the Wonder Lake recreation Area for the improvement of civic and social welfare and to control and maintain the lake bottom and other community property pertinent thereof, and do any and all acts necessary to further said objectives.

• almost 3 millions cubic yards of sediment has been deposited in Wonder Lake since 1929, resulting in degraded water quality.  The loss of water depth has reduced recreational opportunities, and enabled a fishery dominated by rough fish.
• Improvement in watershed management has reduced the amount of sediment entering and remaining in Wonder Lake by 71%. 
• Sediment core samples show no elevated levels of regulated contaminants, or other regulatory barriers to dredging.
• It’s time to act by not putting off dredging “for a few more years”, and a SSA is the fairest way of funding the work.

SSA Boundary

The SSA Boundary is restricted to include only those properties that have deeded access to Wonder Lake or are contiguous to the Lake shoreline.  If your property does not have deeded or geographic access to Wonder Lake, it is not part of the proposed SSA. 

Properties Not Included in the SSA:  Mill Garden;  Giant Oaks;  St. Joseph Court;  Parker’s Highlands;  Feyer’s Subdivision;  Deer Path; Woods Creek;  Spring Creek Estates;  Thatcher Meadows;  any properties in the Villages of Bull Valley, Greenwood, Ringwood.

Why Do I Have to Pay?

Some of the recent discussions related to the proposed Lake Restoration effort involve a variation of the following comments:

“In XXX years of living here, I have never:

• set foot in Wonder Lake”
• swam in Wonder Lake”
• boated in Wonder Lake”
• fished in Wonder Lake”
• looked at Wonder Lake”

These comments would seem to suggest that because these few people have chosen to not use the lake, they should not have to help contribute to the much needed restoration of the lake.  This might seem to be a reasonable argument, except for the “lake rights” covenants that have been bound to their property since the day their lot was created.  The covenants, in effect, make them co-owners of the lake. They can enjoy the benefits, but also shoulder responsibility for its upkeep.   While the specific language of these lake rights found on the property title of each lot can vary from one subdivision to another, they generally read something like this:

“The grantees are given the right to use Wonder Lake for recreation purposes, including hunting and fishing, subject to the regulations of the Grantors or the Master Association when formed, said rights to attach only to the premises herein described and no other, and shall be transferable only with the possession or title to the above described premises.”

One way to look at our situation would be to look at the properties within the proposed Special Service Area (SSA) as being a large condominium complex, where the community assets include a swimming pool and a community center.  Condominium Boards routinely charge a monthly assessment to all condo owners to pay for the cost of maintaining insurance on the property / facilities, and routine upkeep.  The yearly dues paid to the Wonder Lake Master Property Owners Association (MPOA) serve this same function.

However, from time to time, major repairs, such as replacing a swimming pool filter system or replacing a roof, are identified that must be addressed, and the only way to fund those repairs is to have a special assessment levied on all of the condominium owners.  This is what is currently occurring within Wonder Lake, as the MPOA dues at $25 / year only cover the cost of insurance and routine upkeep, and not major capital expenditures, such as lake dredging.  The proposed SSA is the fairest method of equitably distributing the cost of lake restoration to all of those who have an ownership interest in the lake.

Regardless of whether you use the lake or not, you are still a co-owner of a major asset that affects the property value of your home.  Left to die, a degraded lake will adversely impact all homes with lake rights, not just those on the lakeshore.  Restored, Wonder Lake will help preserve and enhance property values.

Using the same “don’t use, shouldn’t pay” logic, the same landowners may feel that if they are not currently enrolling children into the local School District or McHenry County College, they should be allowed to withhold payment on the property taxes that support those institutions.  However, the house that an “empty-nester” couple may sell a few years from now may be the new home of a young couple with three young kids who will enter the local school system at that time.  Similarly, they may someday sell their “lake rights” property to someone who would buy the property specifically because it has lake rights, and they would use the lake in a more active manner.

The key is even if a person chooses to not use or does not need the services / benefits provided through their payment of taxes, the financial responsibility is still theirs. 

Other comments have involved a perceived lack of representation in the decision process to pursue an SSA.  Along with lake rights, property titles within Wonder Lake subdivisions also include a requirement to become a member of their individual subdivision association, as well as the MPOA.  Simply stated, by taking ownership of a parcel of land within the proposed SSA, you are bound by these covenants and by-laws.  Again, while the specific language of these lake rights found on the property title of each lot can vary from one subdivision to another, they generally read something like this:
 “The grantees agree to become members of the Lot/Owners Association to be hereafter formed of Lot/Owners in said subdivision, and agree to become a member by representation of the Master Association hereafter to be formed of all owners on Wonder Lake, and agree to be governed by all the rules and regulations and the by-laws hereafter made by either of the said Associations, or the grantors herein.  The Lot Owners Association to be formed to govern and have supervision of the drives and community grounds of said subdivision; the Master Association to govern the dam, Wonder Lake, and to provide suitable means for the up-keep thereof.”

The relevant section of this covenant is reproduced below:

 ““The grantees……………………..agree to become a member by representation of the Master Association hereafter to be formed of all owners on Wonder Lake,

The MPOA vote to approve pursuing the SSA was cast by individual subdivision directors, representing all the members of their subdivision, as called for by the by-laws and / or covenants established by each respective subdivision.  In consultation with the MPOA attorney, all of the MPOA procedures in voting to pursue creation of the SSA to fund lake restoration were done in accordance with the covenants and the  MPOA by-laws.  

Cost to SSA Participants

Other discussion has involved the cost to SSA participants.  The MPOA has worked to keep the project as financially reasonable as possible to all SSA participants. COST TABLE

• There are approximately 6,500 lots with deeded or geographic access to the lake, and these are the properties proposed for inclusion in the SSA.  It was determined that using the Equalized Assessed Value was the most equitable means of allocating the project cost.  Equalized Assessed Value (EAV), as established by your Township assessor, is intended to represent one-third of the market value of a property.
• Any SSA participant can determine the approximate amount of their assessment by viewing the accompanying table.  The most accurate method is to use the Equalized Assessed Value (EAV) shown on your McHenry County Property Tax Bill, and compare it to the closest matching value shown in the EAV column on the following table. 
• As a representative example, the average home in Wonder Lake has a market value of around $200,000 or an EAV of $ 66,660.  Should the SSA be approved, the cost to the owner of the average $ 200,000 home would be a one-time expense of $1,887.   If they make that upfront payment, they are no longer part of the SSA, and would have no yearly payments.
• If that $ 200,000 homeowner chose not to make an upfront payment, they would pay $149.00 / year for 20 years.  Over the 20 year period, this $ 149 / year payment would equate to $ 2.86 / week, or $ 0.41 / day.  This seems to be an affordable, reasonable amount to fund an activity that will preserve and enhance the property value of SSA participants.
• The MPOA is also working with local financial institutions to create a low-interest loan program for landowners who wish to make the one-time upfront payment, but would find difficulty making the upfront payment at one time.  Under this approach, a short term loan would be obtained to allow the one-time upfront payment to be made, removing the property from the SSA, with the low interest loan paid off over a period of perhaps 1 to 5 years.

Seniors / Low Income

• Using the guidelines established by the US Department of Housing and Urban Development (HUD), qualifying low income and very low income property owners will be eligible to receive either a 40% or 60% rebate reduction in their SSA assessment.
•  For the Wonder Lake area, a two-person family earning $ 47,700 would be considered by HUD as “low income’, and a two-person family earning $ 30,150 would be considered as “very low income”.
• This 40% or 60% reduction would apply whether the landowner chose to make an up-front, one-time payment, or made payments over the 20 year bond period.
• Using the “typical”$ 200,000 home at the 40% rebate level, the net cost to a low income landowner:
• A One-time upfront payment = $ 1,132 OR
• 20 Years of SSA payments = $ 89.40 / year, which equals  $  7.45/ month; $  1.72 / week; or $  0.24 / day. 

• Using the “typical” $ 200,000 home at the 60% rebate level, the net cost to a very low income landowner:
• A One-time upfront payment  =  $ 755 OR
• 20 Years of SSA payments =  $ 59.60 / year, which equals  $  4.97 / month; $  1.15 / week; or $  0.16 / day. 

• The low interest loan program proposed by the MPOA for landowners who wish to make the one-time upfront payment, but would find difficulty making the upfront payment at one time, will also be available to the low income / very low income residents.