Island Park residents fear tax impact of HUD settlement

About 60 Island Park residents wary about a projected tax hike to pay for a nearly $2 million tentative settlement with the federal government over fair-housing violations let the village board know their concerns.

The $1.96-million settlement reviewed at the village board meeting stems from a 1990 suit brought against Island Park and former officials for violating fair-housing laws in the 1980s. Village officials illegally steered some of more than 40 federally subsidized homes away from minorities, whom the U.S. Department of Housing and Urban Development aimed to help, and instead diverted the properties to friends and family, according to settlement documents.

"Did some people profit? You bet," Paul Millus, the village's litigation attorney, said at Thursday's meeting. "At the end of the day . . . the government pursued everyone equally."

The consent decree, signed Nov. 8 by village and federal officials, is awaiting the approval of U.S. District Judge I. Leo Glasser. The village had initially faced $5.4 million in fines.

"This is a milestone for the community," Mayor James Ruzicka said.

Some residents at the meeting questioned the expected property tax increases to begin June 1, 2017, and end Nov. 1, 2023, that would pay $1.061 million of the settlement. The remaining $900,000 will come from the village's insurance company. Taxes would increase by $20 a year for properties assessed at $400,000, village officials said.

"The government knows it's a small area," said Mildred Risolo, 76, who has lived in the village for 50 years. "This is insane. . . . The other people made the mess and we are left holding it."

But Millus noted the village is following the law.

"The math, as much as we don't like it, was based upon federal law," he said.

If the settlement deal is approved, the village would make monthly payments starting in June 2017. In addition, $300,000 would go toward appointing a fair-housing administrator, whose goal would be to get African-Americans -- who make up less than 2 percent of the predominantly white village of 4,655 residents -- to own and occupy at least 17 village homes over four years.

The settlement will allow the village to access more than $200,000 from HUD's Community Development Block Grant program for road repairs, and would also help increase the village's bond rating, making borrowing easier, Ruzicka noted.

"It is a good thing that we put it to bed, we move on and we get this community back to where it should be," he said. "It's over as far as I am concerned. The HUD case is over."