Vernon Hills board signals support for interest-free transitional loans to stand up regional 9-1-1 agency

Vernon Hills trustees on July 9 signaled support for a proposed intergovernmental loan program to finance start-up costs for a new regional emergency dispatch agency known as LACOM (Lake County Consolidated 9-1-1). Staff said the agency will not begin collecting surcharge revenue until it becomes operational — currently anticipated in mid-2025 — and that start-up expenses for hiring, training, software and equipment will require interim financing.

The transition team proposed an aggregate loan pool of about $6 million among participating jurisdictions, with draw requests made in $1 million increments over the first 12'24 months. Vernon Hills would be asked to commit up to $2 million; the proposed term is 10 years with no payments during the two-year transition and annual principal payments thereafter (first payments in fiscal 2027). The transition group recommended interest-free loans to minimize costs for the new agency and its member governments.

Finance materials presented by staff included an example opportunity-cost calculation using a 10-year Treasury rate (4.28% at the time of the presentation) to show that an interest-free $1 million draw would forego roughly $235,000 in investment income over 10 years if the village instead invested that cash. Staff said Lake County would act as fiduciary until LACOM establishes its own finance function, and that additional municipalities (Gurnee and potentially others) have expressed willingness to participate.

Trustees asked practical questions about sequencing, governance and risk: who will hire and oversee the executive director (an executive committee elected by the member board), whether loans could carry interest in later draws, and what would happen if Vernon Hills declined to lend. Staff said the IGA would fix terms (including any interest rate) up front, and that without transition funding LACOM could not hire staff or purchase mission-critical equipment before going live. Several trustees and the police chief emphasized public-safety benefits and the expectation that consolidation will reduce Vernon Hills' long-term dispatch costs, even after accounting for the loan.

Next steps: staff will take consensus feedback to the transition committee and draft an intergovernmental agreement reflecting the loan terms. The IGA could return to the board as soon as the village's next meeting for formal approval; staff indicated the first draw request might come as early as Sept. 1, 2024, depending on LACOM's cash needs.

Speakers quoted in this article spoke at the July 9 Committee of the Whole meeting. The board requested follow-up materials on the draft IGA before any final commitment is made.