The Village of Alsips 2015 Property Tax Year Levy Presentation T - PowerPoint PPT Presentation

The Village of Alsip’s 2015 Property Tax Year Levy Presentation T opics  The Village’s Total Equalized Assessed Value (EAV)  Where Property Taxes Go Across All Taxing Bodies  Key FY15 Audit Results  FY16 Budget Highlights  Bond and Interest Levy  FY15 Actuary Results for the Police and Fire Pension Funds  Where Property Taxes Have Gone And Will Go (Within Village)  The Board Determined 5.00% Increase In The Village’s Tax Levy

Equalized Assessed Valuation 2008 2009 2010 2011 2012 2013 2014 $802,041,333 $749,936,394 $722,163,750 $598,824,867 $548,725,983 $510,949,666 $491,782,726 Since tax year 2008, the Village’s total EAV dropped 38.7% Since the tax rate varies inversely with the EAV, and because the Village levies by dollar amounts, the EAV usually does not influence the amount of property tax receipt brought into the Village. The exception is in TIF districts. Because of this large drop in EAV, all but the old TIF #1 (123 rd St. to 127 th St.) have brought in little or no monies for in recent years for potential economic development. Residential 38.0%; Commercial 18.1%; Industrial 43.8%; Other 0.1% Per 2013 Debt Disclosure based on 2012 EAV per Cook County Tax Year 2014: 96.1% of taxes extended were distributed to the Village Tax Year 2013: 99.3% of taxes extended were distributed to the Village

Where Property Taxes Go Elementary School District Consolidated High School Village of Other (Cook, Libr., (Avg. of Districts 125,126, & 130) District 218 Alsip Park D, MWRD, etc.) 39.7¢ 29.7¢ 13.4¢ 17.1¢

FY15 Audit Results  General Fund actual revenues were $746,597 or 3.9% higher than budgeted.  General Fund actual expenditures were $736,112 or 3.7% lower than originally budgeted.  The General Fund had a positive net change of $1,258,101, leading to a strong $12,357,238 fund balance. The unassigned fund balance of $10,119,323 is 54% of operating expenditures. (A large portion of this unassigned fund balance will go into an OPEB trust fund.)  Road and Bridge had a positive net change in fund balance of $278,661. Without loan proceeds of $940,000, the change in fund balance was a negative $661,339. The fund balance is $1,262,983.  Water and Sewer had a negative change in net position of ($1,822,125), and is down to an unrestricted fund balance of $953,967.

Governmental Activities Revenue $25.6 million Governmental Activities - Revenue FY15 Other Taxes 43.4% Other 2.8% Charges for Service 15.0% Property Taxes 38.5% Property taxes totaled $9.87 million, a 5.9% increase from the prior year. Operating & Capital Grants 0.3% Other Taxes include sales taxes, state income tax (LGDF), fuel, and real estate transfer taxes

Governmental Activities Expenses $25.3 million Governmental Activities-Expenses FY15 Public Safety 62.2% Road & Bridge 13.1% Building 1.9% Health & Welfare Interest General 1.4% 5.2% Government Capital 14.9% projects 1.4%

FY16 (Current) Budget Highlights General Fund Road & Bridge Motor Fuel Tax Water & Sewer Heritage I Heritage II Est. Revenue 17,433,210 2,165,750 545,203 10,123,500 1,430,100 3,258,600 Appropriation -18,171,023 -3,510,110 -1,138,786 -10,513,993 -1,693,821 -3,396,183 Gain/(Loss) $ (737,813) $ (1,344,360) $ (593,583) $ (390,493) $ (263,721) $ (137,583)  Almost all major operating funds showed deficit budgets in at least the last four fiscal years’ appropriation ordinances passed  Factors that contributed to these deficits are:  Revenues are usually projected conservatively  Authorized expenditures are not all made in a fiscal year  Sometimes fund balances are spent down for planned capital projects, such as FY16 Mather Ave. & the Heritage I & II resurfacing projects  Property taxes for the General Fund (Corporate levy) and the R&B Fund have not keep up with costs (as seen on subsequent slides)  Stagnant vehicle sticker prices have not kept up with R&B Fund costs

Bond and Interest Levy Bond Original Amount Due Levy FY16 Funding Series Par FY16 Amount Source 2005B Bond $273,752.50 $150,564.00 Water Fund 45% $2,425,000.00 (Refi 1999 & 2000) Tax Levy 55% 2007 Bond $6,825,000.00 $253,685.00 $0.00 Water Fund 100% (Partially Defeased) (Original Amt) $0.00 Road & Bridge 50% 2009A Bond $7,815,000.00 $704,015.00 Heritage II 50% 2010 Bond $3,550,000.00 $594,850.00 $594,850.00 Tax Levy 100% (Refi 2001 & 2001A) Heritage I 41.8% 2015 Bond Heritage II 10.6% (Refi 2003 & $6,685,000.00 $458,823.90 $48,307.00 Water Fund 37.0% Partially Adv. Refi 2007) Tax Levy 10.5% TOTAL $2,285,126.40 $793,721.00

Actuarial Assumptions  Actuarially Recommended Tax Levy  Reflects required practice for accounting standards  Reflects Entry Age Normal funding; 19-year amortization (100% by 2033); Smoothed market (5-year avg. market value); a custom mortality table combining IDOI data and the RP 2000 blue collar tables (new); 7.0% Investment returns; Individual payroll increases of 4-11% (a declining service based payroll scale) and a total payroll increase of 3.50% (new). Changes in these assumptions this year increased the unfunded liabilities and the recommended levy.  Department of Insurance  Projected Unit Cost (PUC) is a minimum funding method required per Illinois statute that does not reflect audit standards. The Village continues to exceed these requirements.  PUC funding method; 90% funded by FY 2040; Smoothed market; RP 2000 Mortality table; Interest Rate 6.75%; Payroll increase 4.5%

Actuary Police & Fire Pension Funds  Highlights from Actuary on Pension Funds : POLICE PENSION FIRE PENSION Approximate Rate of 6.9% 7.6% Investment Returns (LY 9.1%) (LY 9.3%) Ending 4/30/2015 35.7% 54.8% Percent Funded for Period Ending 4/30/2015 (LY 36.7%) (LY 58.1%) $2,990,818 $1,964,649 Actuarial Report’s Levy Requirement (28.2% More Than LY’s (27.7% Larger Than LY’s (w/o reserve) $2,333,349) $1,538,355) $2,450,000 $1,615,200 Actual Amount of 2015 (5.0% More Than LY’s (5.0% Larger Than LY’s Tax Year Levy (w/o reserve) $2,333,349) $1,538,355)

Pension Levies: Tax Years 2011-2015 Tax Year Tax Years 2011- Tax Year 2015 Tax Years 2011-2014 Fund (Includes 2015 2015 Overall Actuarially Determined Actuarially Determined Reserves) Increase Increase Contribution Increase Contribution Increase Police Pension 5.0% 41.6% 28.2% 72.8% Fire Pension 5.0% 32.0% 27.7% 60.6%  Due to the rapid increase in the public safety funds’ actuarially determined Annual Required Contributions (ARCs), for the first time in many years the Village will not bring in enough property taxes to make the ARCs. The above table shows what will be levied and what should have been levied for the ARC. The combined unfunded liability now stands at $51.8 million.  A similar levy cannot not exist for the Village’s retirees’ healthcare liability. That $43.7 million unfunded healthcare liability is growing by around $1.65 million per year. Continued unchecked, it will likely see growth rates larger than the pension levies’ growth rates shown above, putting even more financial pressure on the General Fund, the Road & Bridge Fund, and the Water & Sewer Fund.

Pension Levies’ Effect On Other Funds  The increasing police and fire pension levies have consumed the other levies putting significant financial pressure on Village operations. OPEB debt payments will follow this trend.  In the preceding three levies, the Corporate levy had increased a total (not annual) of less than 3%, the Road & Bridge levy had actually declined by almost 3%, and the Bonds & Interest levy had increased by 0.7%.  More recently, last year’s Corporate levy decreased 0.78% while the Road & Bridge levy was flat.  These increases are significantly lower than wage & benefit increases during that period.

Property Tax Year 2015 Levy Summary  The Village’s 2015 property tax levy was discussed at the publically open Finance Committee meetings on November 24, 2015 and November 30, 2015.  The Village Board voted unanimously to determine an aggregate levy 5.00% more than the Village’s 2014 levy at a special Village Board meeting on November 30, 2015.  A 5.00% increase will bring in approximately $450,000.  Example : For an Alsip homeowner paying $5,000 a year in property taxes, the increase would be $2.80 per month. $2.80/mo. = ($5,000/yr. )(yr./12 mo.)(13.42% of bill)(5.00%)  The levy must be voted on by the Board and submitted to Cook County by the last Tuesday every December.