MCCD Admits Tax Hike Bill “Expands the District’s Authority to Incur Additional Debt”

Pam Althoff

Pam Althoff

Karen McConnaughay

Karen McConnaughay

Tryon looking at camera

Mike Tryon

Those who don’t read the comments under articles often miss a great expansion of the information available on the subject.

Take, for example, the articles on Pam Althoff’s, Karen McConnaughay’s and Mike Tryon’s Senate Bill 3341.

That’s the bill that allows the McHenry County Conservation District to sell more bonds, that is, borrow more money, without voter approval.

Yesterday, Althoff’s explanation of her bill brought forth erudite comments from two people.

Susan found the following December 8th statement from MCCD President David Brandt:

ADDENDUM TO THE OFFICIAL STATEMENT DATED DECEMBER 16, 2014 Relating to the issuance of MCHENRY COUNTY CONSERVATION DISTRICT MCHENRY COUNTY, ILLINOIS $108,215,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2014

Please be advised that the above-referenced Official Statement is hereby amended by adding the following footnote in the Section entitled “Financial Information — Legal Debt Margin”:

(4) The Illinois General Assembly passed Senate Bill 3341 on December 3, 2014 (“SB 3341”).

SB 3341 expands the District’s authority to incur additional debt [emphasis added] by

(a) authorizing the District to issue non-referendum bonds for the development of real property all or a portion of which was acquired with referendum-approved bonds and

(b) providing that referendum-approved bonds and bonds issued to refund or continue to refund referendum-approved bonds do not limit the ability of the District to issue non-referendum bonds within its .575% non-referendum debt limit.

The Governor has yet to act on SB 3341, and the District can give no assurance whether SB 3341 will become law. Even if SB 3341 becomes law, the District has no plans to issue any bonds in the next six months.

/s/ David Brandt

President, Board of Trustees
McHenry County Conservation District,
McHenry County, Illinois

Date of this Addendum: December 8, 2014

= = = = =
Let’s think on that for a while. And, if you want to express your opinion to Govenror Pat Quinn on whether he should sign or veto the bill, you may send him at email at the address below:

https://www2.illinois.gov/gov/Pages/ContacttheGovernor.aspx

If Quinn does not sign or veto the bill, it will automatically become law sixty days after passage.

Read the original addendum here.


Comments

MCCD Admits Tax Hike Bill “Expands the District’s Authority to Incur Additional Debt” — 10 Comments

  1. What happens after 6 months?

    If these 3 are for the taxpayers ,why do they want to suck more money out of them rather then save taxpayers money?

    Remember who did what at election time.

    I know I have made my notes.

  2. Backstabbing politicians belong to both “parties”; same animals in different suits.

    Vote against incumbents.

  3. Has the time come where we need the County GOP to demand that those who run as Republicans be required to post on their campaign website their position on EVERY item listed on the Republican platform ?

    I am fed up with people running as Republicans but in FACT they are complete liberals!!!

    The majority of members of the County Board and the State Legislature elected GOP people run on the Republican platform due to the ‘Right to Life’ issue but have zero intention of adhering to the balance of the GOP platform.

  4. Ms. Althoff,

    In response to your statement:

    “While some believe this legislation is comparable to “an identity thief pulling a cash-out refinancing from your home and keeping the cash for themselves,” the better comparison would be “paying down the principal on your mortgage and refinancing to get a better rate long term.””

    I have an opinion, and I want to justify that opinion with facts.

    My request to you, if you truly want the will of the people heard by Quinn as he decides whether to veto this bill, is to use your power with the NW Herald to print your opinion as well as some opposition argument, with supporting arguments attached, and the link to Gov, Quinn email for veto or not of this bill.

    I do not believe the principal on the mortgage on my house created by MCCD borrowings enabled by Senate Bill 3341 will ever be paid down.

    Here’s why:

    1. In 2005 MCCD had over $88.5 million debt. In 2014, MCCD had over $132.3 million debt (which is higher than statutory maximum allowed.). The Annual Report comments speak to the expectation that property values will begin to rise in 2015 and therefore allow the debt cap to lift, allowing more freedom to accrue more debt.

    1.a. Compare and contrast property values to debt: Assessed value of taxable McHenry County property 2005 was $8.56 billion. Assessed value 2013 $7.19 billion.

    MCCD borrowed money and spent money more and more throughout all the intervening years that our homes declined in value.

    MCCD took in $12.15 million property taxes in 2005. MCCD took in $19.52 million in property taxes in 2014.

    From 2006 through 2014, MCCD’s total tax taken from County taxpayers has risen, even as home values declined to below 2004 values, even as population recently declined, and even as the statutory borrowing limit was exceeded in 2013, even purchasing more land while claiming insufficient funds to manage land already owned.

    2. Based on the following statement, and language of demurring Trustees and Executive Director, I believe that financial advice to cool it on spending will continue to be ignored by those empowered to borrow and spend.

    (MCCD Treasurer from the June 19,2014 Finance & Administrative Committee minutes):

    “10.0 FINANCIAL PLANNING

    “Treasurer Krautstrunk stated he was concerned about the recent Moody’s downgrading of the District’s debt rating to Aa1 and especially of the assigned ‘negative outlook’ by Moody’s.

    “He stated that the ‘negative outlook’ meant that Moody’s expected another downward step for the District within their rating system at some point in the future.

    “Treasurer Krautstrunk said that this reinforces his opinion that the District should not be expending any funds for new acquisitions of land and that all available funding should be designated toward the ‘existing’ needs of the District.”

    3. Based upon the following statement in official statement of MCCD New Bond Issue 2014, I cannot interpret any other way than literally the MCCD President’s statement:

    “SB 3341 expands the District’s authority to incur additional debt …”

    ADDENDUM TO THE OFFICIAL STATEMENT DATED DECEMBER 16, 2014 Relating to the issuance of MCHENRY COUNTY CONSERVATION DISTRICT MCHENRY COUNTY, ILLINOIS $108,215,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2014

    Please be advised that the above-referenced Official Statement is hereby amended by adding the following footnote in the Section entitled “Financial Information — Legal Debt Margin”:

    (4) The Illinois General Assembly passed Senate Bill 3341 on December 3, 2014 (“SB 3341”).
    SB 3341 expands the District’s authority to incur additional debt by

    (a) authorizing the District to issue non-referendum bonds for the development of real property all or a portion of which was acquired with referendum-approved bonds and

    (b) providing that referendum-approved bonds and bonds issued to refund or continue to refund referendum-approved bonds do not limit the ability of the District to issue non-referendum bonds within its .575% non-referendum debt limit.

    The Governor has yet to act on SB 3341, and the District can give no assurance whether SB 3341 will become law. Even if SB 3341 becomes law, the District has no plans to issue any bonds in the next six months.

    /s/ David Brandt
    President, Board of Trustees
    McHenry County Conservation District,
    McHenry County, Illinois

    Date of this Addendum: December 8, 2014

    3.a. Incurring additional debt through cash-out refinancing means my mortgage on my home incurred by “identity thief” (someone empowering himself without my permission to borrow money in my name, with my assets as full pledged collateral) will never be paid off.

    When a surplus accrues, there will be another cashout refi, extending the debt further into the future.

    3.b. Did the identity thief have my permission because I voted yes on a referendum to borrow a specific amount of bond debt in 2005?

    Well, maybe that is what the law says, that a bond referendum is actually permission for a perpetual line of credit that may be extended into the future by the taxing body, and forever be reflected in property tax rates and home values.

    If so, I believe future Borrowing Referendums should include that language as a warning, like they have on cigarette packages.

    4. I’m imploring this taxing body to cool it on the spending (and borrowing) because while I do hold conservation of nature as a value, at each analysis I ask myself: At what cost?

    Our property taxes for 2013 were 3.68% of home values. This causes home values to continue lower, as unfavorable comparisons are made by potential homebuyers to the rest of America which has average property tax rates around 1.25% of home value.

    Another anchor holding down property values here is that to qualify for a conforming $200,000 mortgage loan on a home at the national average property tax rate of 1.25%, a borrower would need to prove income of around $50,000—but in McHenry County at our tax rate of 3.68%, a borrower would need annual income of around $68,000 to qualify for the same conforming loan.

    Is conservation of land (or any other value) truly good if it is never held up to scrutiny with the question: “At What Cost?”

    5. It doesn’t look like this taxing body (for one) has the self discipline to restrain its own spending within legally stipulated amounts.

    SB 3341 will grant a technical mechanism to bypass those statutory borrowing caps by facilitating cash-out refis.

    Please leave the taxpayers one of the few remaining defenses we have left to us against the unrestrained borrowing and spending by taxing bodies empowered to encumber our homes with debt.

    Susan Handelsman Woodstock IL

  5. Well said Susan.

    It seems the pick-pocketing of the tax paying public will never cease in the state of Illinois.

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