The outlook for Park Ridge’s 2014 property tax levy has improved slightly, which means the city won’t have to seek the 23.22 percent hike originally planned for next month, officials said.
The currently proposed levy is now 22.09 percent higher than last December’s, City Manager Shawn Hamilton told aldermen Monday night.
As of this week, Hamilton said the city will seek $21,675,111 from residents next year for the 2015-16 budget – $3,921,751 more than it did last year, but $200,000 less than last week’s estimated amount.
Officials have said the main drivers of the percentage change are the ballooning debt owed by the special taxing district used to renovate part of Uptown – as downtown Park Ridge is known – and the successful Park Ridge Public Library referendum request. But Hamilton said the difference from last week is due to an opportunity to pay off some of that debt ahead of schedule.
Doing so would save $837,151 over the next four fiscal years, he added.
“I know I’m going to save money but I don’t know how yet, whether that’s a loan or by refinancing the debt,” Hamilton said on Tuesday.
As for the library’s portion of the levy, the Nov. 4 binding referendum asked residents whether to increase the Park Ridge Public Library’s portion of the combined city/library levy from .150 percent to .368 percent.
Voters said “yes” by a 57.27 percent to 42.73 percent margin, according to unofficial vote totals on the Cook County elections website.
On Nov. 11, the library’s board of directors unanimously approved a 2014 property tax levy of $4,826,734 – the maximum they could seek, and about $1 million more than the City Council allowed the library last year.
At that meeting, Executive Director Janet Van De Carr said the first year’s additional revenue will be used to balance the library’s budget, restore an hour of additional service on Fridays and Sundays, pay for general window repairs and new lights for the reference department, augment the technology replacement and new materials budgets, as well as cover additional medical and dental insurance costs and consulting fees for pending capital projects.
Although the city and library levies are separate line items on the property tax bill, the City Council has the final word on what the library’s levy will be.
Because the referendum is binding, the City Council “will be approving whatever the library board asks of us,” Mayor David Schmidt told residents who expressed concern Monday that the Council might do otherwise.
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The proposed 2014 levy includes $583,022 more for the city’s general fund, which pays for basic services like police, fire and public works; $311,235 more for police and fire pensions – which Hamilton said will be the main topic on Monday when aldermen meet as the Council’s informal committee-of-the-whole – and almost $75,000 for municipal retirement fund and Social Security costs.
But the Uptown Tax Increment Financing district’s soaring debt remains the driving factor of this year’s proposed levy hike. Of the proposed total $3.9 million increase, $2 million is slated to pay that debt.
Former Finance Director Kent Oliven warned in March that Uptown TIF costs will increase by an average of $400,000 in six of the next eight fiscal years because the district cannot support its debt from its own property tax base – a difference that must be paid by general property tax revenue.
In a TIF district, property valuations are frozen in the year the district is created. Taxes paid above that amount — the increment — can be used to borrow against or pay for public infrastructure improvements, land acquisition and other allowed costs.
Hamilton said, though, that the district’s overall equalized assessed value is still higher than it was two or three years ago, which means the district is earning a slightly better increment.
Between that factor and a legal maneuver allowing the city to bundle properties within the TIF district whose values have decreased and segregate them from the still-healthy properties, the district’s projected loss through 2025 is now “only just under $23 million” — $22,928,397 – instead of the original estimate of about $25,467,943, Hamilton said.
“It’s never going to get back to where it was, but we are experiencing some growth and it’s more than it was two years ago when the last projections were made,” he added. “Hopefully the bottom is in our rear view mirror.”
Aldermen will also discuss the property tax levy on Dec. 1 when the “first reading” of the ordinance setting the levy is slated for a vote in the full Council, on Dec. 8 when they meet again as the committee, and at the full council’s Dec. 15 meeting, when a public hearing and the second, final reading of the ordinance are scheduled.
Property tax levies must be filed with the Cook County Treasurer by Dec. 30.