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Home My WebLink AboutTab 4. 2011 Property Tax Scenarios Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: MICHAEL E. JANONIS, VILLAGE MANAGER FROM: FINANCE DIRECTOR DATE: APRIL 21, 2011 SUBJECT: 2011 PROPERTY TAX LEVY SCENARIOS Included with this memo are several scenarios for the 2011 property tax levy that will be used to facilitate discussion at our April 26th workshop. Also included for reference is the actual levy history from 2006 through 2010. Discussion on the proposed 2011 levy is made more difficult this year as the state considers diverting state-collected local government revenues away from local communities to address the state budget deficit. As mentioned in the workshop cover memo, these scenarios are not intended to be all-inclusive for consideration for the levy, but are meant to be used to kick off discussion. Below are just a few points on each levy scenario with a more detailed explanation to be provided at the meeting. 2010 Actual Levy a zero-percent increase The total extended levy for 2010 was $15,194,638 which represents from the prior year. The initial proposed 2010 levy was to increase 5.0%. Increases in the funding requirements for debt service and public safety pensions were absorbed through reducing other areas of the levy. In reaching a flat levy, the General Fund portion was decreased 14.0%, a reduction of $1.1 million from $8,044,484 to $6,921,545. 2011 Levy – Scenario One This proposed levy for 2011 reflected in the 2012 Forecast Budget shows an increase of 4.33% from the 2010 levy. The total levy resulting from this scenario is $15,852,354. The levy is adjusted for the debt service and public safety pensions as required. The Refuse portion of the levy is held flat while the General Fund portion increased just $282,715. The rate of increase of the proposed 2011 levy falls within the self-imposed cap of between 3.5% and 5.0%. 2011 Levy – Scenario Two This scenario for the 2011 levy provides for an increase in the General Fund levy to recoup lost revenues if the state were to divert state-collected local government revenues (income taxes) away from local communities. The amount of state-collected revenue being considered for reduction is approximately $23.40 per capita. For Mount Prospect that will mean a reduction in income taxes of $1,316,601. For scenario two, the levy for the General Fund increases from $7.2 million to $8.5 million while all other components of the levy remain unchanged. The percent increase from the prior year becomes 13.0% (versus 4.33%) and the total levy grows to $17,168,955. 2011 Property Tax Levy Scenarios April 21, 2011 Page 2 of 2 2011 Levy – Scenario Three This scenario for the 2011 levy again provides for required increases in the debt service and pension portions of the levy. The Refuse portion is held flat (for the fourth consecutive year) while the General Fund portion is increased further by the amount of the current forecast deficit for 2012. The 2012 Forecast Budget is currently showing a deficit of $1,044,739. The percent increase from the prior year resulting from this scenario is 19.9% with the total levy becoming $18,213,694. Please note this scenario includes the additional amount needed to recoup diverted state-collected revenue and the amount needed to address the 2012 forecast budget deficit. Obviously there will be other factors to consider before arriving at the final levy amount for 2011. I feel these scenarios provide a good stepping-off point for our discussion on the 26th. Let me know if you have any questions. David O. Erb Finance Director DOE/ C:\Documents and Settings\langell\Local Settings\Temporary Internet Files\Content.Outlook\VXDJOMEP\April 2011 Workshop - Scenarios.docx Village of Mount Prospect y Property Tax Levy Histor 2006 - 2010 20062007200820092010 Total Annual Levy General Corporate7,491,5167,772,4487,772,4488,044,4846,921,545 Refuse2,006,4042,066,5971,785,0001,785,0001,785,000 Police Pension1,359,9491,436,5911,551,5182,055,9872,516,878 Fire Pension1,328,0511,417,6301,531,0401,767,5332,183,477 Debt Service1,320,6541,321,5721,832,2631,541,6341,787,738 Total 13,506,57414,014,83814,472,26915,194,63815,194,638 % of Total Levy General Corporate55.5%55.5%53.7%52.9%45.6% Refuse14.9%14.7%12.3%11.7%11.7% Police Pension10.1%10.3%10.7%13.5%16.6% Fire Pension9.8%10.1%10.6%11.6%14.4% Debt Service9.8%9.4%12.7%10.1%11.8% Total 100.0%100.0%100.0%100.0%100.0% % Increase from PY General Corporate2.7%3.8%0.0%3.5%-14.0% Refuse3.0%3.0%-13.6%0.0%0.0% Police Pension5.9%5.6%8.0%32.5%22.4% FirePension11.2%6.7%8.0%15.4%23.5% FirePension11.2%6.7%8.0%15.4%23.5% Debt Service-9.4%0.1%38.6%-15.9%16.0% Total 2.5%3.8%3.3%5.0%0.0% Ð®±°»®¬§Ì¿¨Ô»ª§¾§Ü»½®·°¬·±² +Ë444Ë444 ,Ë444Ë444 -Ë444Ë444 .Ë444Ë444 ùª±££ /Ë444Ë444 Æøk 0Ë444Ë444 É£±ÃÉªÃ£ª 1Ë444Ë444 úÃÉªÃ£ª 2Ë444Ë444 Â`Ã 3Ë444Ë444 4 244.244-244,244+2434 C:\Documents and Settings\langell\Local Settings\Temporary Internet Files\Content.Outlook\VXDJOMEP\Levy History - '05- '10.xlsx 2010 Final Property Tax Levy VILLAGE OF MOUNT PROSPECT AND THE MOUNT PROSPECT PUBLIC LIBRARY SUMMARY OF 2010 PROPERTY TAX LEVY 2% NetProvisionTotal 20102010Loss and2010 LevyAbatementLevyCostsExtension VILLAGE OF MOUNT PROSPECT General Corporate Fund6,785,82806,785,828135,7176,921,545 Refuse Fund1,750,00001,750,00035,0001,785,000 Police Pension Fund2,467,52702,467,52749,3512,516,878 Firefighters' Pension Fund2,140,66402,140,66442,8132,183,477 Debt Service Funds Series 2003 (Ord. 5301)912,0580912,05818,241930,299 Series 2009 (Ord. 5724)417,2630417,2638,345425,608 2009B335,6000335,6006,712342,312 2009C135,02347,25887,7651,75589,520 Total Village14,943,96247,25814,896,704297,93415,194,638 MOUNT PROSPECT PUBLIC LIBRARY Library Operations00000 Library Debt Service00000 Total Library00000 TOTAL - VILLAGE OF MOUNT PROSPECT AND PUBLIC LIBRARY14,943,96247,25814,896,704297,93415,194,638 SPECIAL SERVICE AREA NO. 51,515,46401,515,46430,3091,545,773 20092010 Increase Over Prior Year 15,194,63815,194,6380.00% C:\Documents and Settings\langell\Local Settings\Temporary Internet Files\Content.Outlook\VXDJOMEP\2010 Fina Levy - April Workshop.xlsx Scenario One 2011 Property Tax levy (used in 2012 Forecast Budget) VILLAGE OF MOUNT PROSPECT AND THE MOUNT PROSPECT PUBLIC LIBRARY SUMMARY OF 2011 PROPERTY TAX LEVY 2% NetProvisionTotal 20112011Loss and2011 LevyAbatementLevyCostsExtension VILLAGE OF MOUNT PROSPECT General Corporate Fund7,063,00007,063,000141,2607,204,260 Refuse Fund1,750,00001,750,00035,0001,785,000 Police Pension Fund2,640,25402,640,25452,8052,693,059 Firefighters' Pension Fund2,290,50902,290,50945,8102,336,319 Debt Service Funds Series 2003 (Ord. 5301)912,8820912,88218,258931,140 Series 2009 (Ord. 5724)417,2630417,2638,345425,608 2009B379,8500379,8507,597387,447 2009C135,02347,25887,7651,75589,520 Total Village15,588,78147,25815,541,523310,83115,852,354 MOUNT PROSPECT PUBLIC LIBRARY Library Operations00000 Library Debt Service00000 Total Library00000 TOTAL - VILLAGE OF MOUNT PROSPECT AND PUBLIC LIBRARY15,588,78147,25815,541,523310,83115,852,354 SPECIAL SERVICE AREA NO. 51,515,46401,515,46430,3091,545,773 20102011 Increase Over Prior Year 15,194,63815,852,3544.33% C:\Documents and Settings\langell\Local Settings\Temporary Internet Files\Content.Outlook\VXDJOMEP\2011 Forecast Budget Levy.xlsx Scenarion Two 2011 Property Tax levy Reduction in LGDF VILLAGE OF MOUNT PROSPECT AND THE MOUNT PROSPECT PUBLIC LIBRARY SUMMARY OF 2011 PROPERTY TAX LEVY 2% NetProvisionTotal 20112011Loss and2011 LevyAbatementLevyCostsExtension VILLAGE OF MOUNT PROSPECT General Corporate Fund8,353,78508,353,785167,0768,520,861 Refuse Fund1,750,00001,750,00035,0001,785,000 Police Pension Fund2,640,25402,640,25452,8052,693,059 Firefighters' Pension Fund2,290,50902,290,50945,8102,336,319 Debt Service Funds Series 2003 (Ord. 5301)912,8820912,88218,258931,140 Series 2009 (Ord. 5724)417,2630417,2638,345425,608 2009B379,8500379,8507,597387,447 2009C135,02347,25887,7651,75589,520 Total Village16,879,56647,25816,832,308336,64717,168,955 MOUNT PROSPECT PUBLIC LIBRARY Library Operations00000 Library Debt Service00000 Total Library00000 TOTAL - VILLAGE OF MOUNT PROSPECT AND PUBLIC LIBRARY16,879,56647,25816,832,308336,64717,168,955 SPECIAL SERVICE AREA NO. 51,515,46401,515,46430,3091,545,773 20102011 Increase Over Prior Year 15,194,63817,168,95512.99% C:\Documents and Settings\langell\Local Settings\Temporary Internet Files\Content.Outlook\VXDJOMEP\2011 Levy - LGDF Funds Removed.xlsx Scenario Three 2011 Property Tax levy Reduction in LGDF and Operating Deficit VILLAGE OF MOUNT PROSPECT AND THE MOUNT PROSPECT PUBLIC LIBRARY SUMMARY OF 2011 PROPERTY TAX LEVY 2% NetProvisionTotal 20112011Loss and2011 LevyAbatementLevyCostsExtension VILLAGE OF MOUNT PROSPECT General Corporate Fund9,378,03909,378,039187,5619,565,600 Refuse Fund1,750,00001,750,00035,0001,785,000 Police Pension Fund2,640,25402,640,25452,8052,693,059 Firefighters' Pension Fund2,290,50902,290,50945,8102,336,319 Debt Service Funds Series 2003 (Ord. 5301)912,8820912,88218,258931,140 Series 2009 (Ord. 5724)417,2630417,2638,345425,608 2009B379,8500379,8507,597387,447 2009C135,02347,25887,7651,75589,520 Total Village17,903,82047,25817,856,562357,13218,213,694 MOUNT PROSPECT PUBLIC LIBRARY Library Operations00000 Library Debt Service00000 Total Library00000 TOTAL - VILLAGE OF MOUNT PROSPECT AND PUBLIC LIBRARY17,903,82047,25817,856,562357,13218,213,694 SPECIAL SERVICE AREA NO. 51,515,46401,515,46430,3091,545,773 20102011 Increase Over Prior Year 15,194,63818,213,69419.87% C:\Documents and Settings\langell\Local Settings\Temporary Internet Files\Content.Outlook\VXDJOMEP\2011 Levy - LGDF and GF Deficit.xlsx Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: MICHAEL E. JANONIS, VILLAGE MANAGER FROM: FINANCE DIRECTOR DATE: APRIL 21, 2011 SUBJECT: GENERAL FUND LEVY ANALYSIS During previous discussions with the Village Board regarding annual property tax levies it was noted what impact alternate levy percentages could have on General Fund revenue. Attached please find a spreadsheet that illustrates how deviating from a regular annual increase (similar to the annual water rate increase) impacts revenue in the year of the levy and for future years. The spreadsheet provides information on the annual levy broken down by purpose (corporate, refuse, pensions, etc.) for the period 2005 – 2011. Also included in the spreadsheet are comparisons between the actual General Fund levy during this time period and what a hypothetical General Fund levy could have been if regular annual increases were followed. Results of the comparison are included along with how by following the schedule for regular increases altered the levy during the 6 year period. Below are a few bullet points worth noting: Between 2005 and 2010 the actual General Fund levy decreased from $7,291,530 to $6,921,545. During the same period the General Fund levy, following regular annual increases, grew to $8,859,732. Annual shortfalls (when comparing the actual to the hypothetical levy) in revenue begin in 2006 and continue each year growing to over $1.6 million by 2010. Cumulative shortfalls in revenue by 2010 total over $2.2 million. Although the annual loss in revenue becomes significant by 2011, the actual impact to the property tax levy is small. From 2006 through 2011, the average annual levy increase for the actual levy was 3.2% (this includes a zero percent increase in 2010) while the average annual increase in the hypothetical levy was 4.9%. This hypothetical levy is still below the self-imposed cap on annual increases to the levy which is 3.5% - 5.0%. I will plan on walking through the attached spreadsheet with the Board and Finance Commission at the th Financial Planning workshop on April 26. Let me know if you have any questions. David O. Erb Finance Director C:\Documents and Settings\langell\Local Settings\Temporary Internet \Content.Outlook\VXDJOMEP\General Corporate Levy Analysis.docx Files ß³±«²¬Ô»ª§