This is found on page 32 of the Lakewood Tax Increment Financing District feasibility study:
Possible ways to spend the Lakewood TIF bond money.
The line at the bottom has stirred some interest.
It shows $1 million for “affordable housing construction.”
Lakewood has been put on a watch list under the Affordable Housing Planning and Appeal Act.
There are sixty-eight other Illinois towns, including the following in McHenry County:
Lakewood’s proposed new TIF District where the money will be spent.
- Algonquin
- Barrington Hills
- Bull Valley
- Cary
- Fox River Grove
- Johnsburg
- Oakwood Hills
- Port Barrington
- Prairie Grove
- Spring Grove
One objector to Lakewood’s Tax Increment Financing District wonders if Lakewood will meet its requirement for low-income housing on the western side of Route 47–well away from where most Lakewood residents live.
It doesn’t exactly answer the question but the Village of Lakewood Comprehensive Plan on the home page of the village website can give you a clue where they plan to put residential.
It’s actual not the comprehensive plan, just Map 4: Future Land Use.
(Would be nice to have the entire plan on the village website but this Village like Crystal Lake High School District 155 has a knack of omitting information that would be useful to citizens from its website.)
There are categories for Estate Residential, Low Density Residential, Medium Density Residential, and High Density Residential on the map.
In the TIF District the only residential is Estate Residential.
But then again the Sportsplex is proposed on land that the comprehensive plan lists as Estate Residential and Recreation.
Note that the Golf Courses are categorized as Recreation in the comprehensive plan map.
http://www.village.lakewood.il.us
It should ALL be designated low income – because that’s where we are all headed if they keep this up.
The poor farm!
I’d like everyone to acknowledge something I’ve just realized: how honorable Steve Willson and Cal Skinner are for investigating the full impact of this tif.
Steve and Cal are Lakewood residents I think.
This tif creates an elegant and profitable way for Lakewood to deal with pesky AHPAA requirements:
1. It allows a space where Lakewood can locate mandated low income housing without any impact on home values in the real Lakewood east of 47.
2.It manipulates entirely different (non-Lakewood) taxpayers into footing the bill.
3.It creates an entity which will pay dividends for 35 years to all future Lakewood managers to distribute to developers as she or he sees fit.
Lakewood residents who are honorable enough to examine all the dirty angles of this deal deserve respect and gratitude from all McHenry County residents who will be paying higher taxes so that Lakewood residents won’t.
NUMBERS:
1. Each student in Woodstock D200 costs $10,000 per year (minimum)to property taxpayers in the District
(that is, taking into account State and Federal funding, but NOT taking into account unfunded pension liability and certain accrued but future-booked interest on debt, or Obamamcare Cadillac Health Plan 40% Excise Tax due to begin next year).
D200 taxpayers are taxed 2.73% of total home value just by D200. Other taxing bodies in the County bring D200 tax rates above 4% of property value…and rising.)
2. If Lakewood has 888 housing units, and is required to have 10% “affordable housing”, then:
.10(888+x)=x
with “x” being the amount of new “affordable housing units” it will need to create.
X=99 new units. (yes there are 2.7 percent already in Lakewood. But if the tif develops “estate homes” as indicated by their plan, 10% of those will also need to be “affordable housing”. So let us for now perform the analysis on 99 new units).
3. 99 housing units with 2.7 persons per unit, and 20% of persons being above 5 years of age but below 18 years of age suggests 54 new students which this Lakewood tif will require by law to be educated by D200 (but without paying a single penny toward that cost).
4. 54x$10,000=$540,000 per year of cost being deflected by Lakewood onto NON-LAKEWOOD TAXPAYERS.
5. By the numbers projected by Lakewood in their tif eligibility study (the only study or development plan they have made public), there will be $34 million of new EAV created by tif.
At Lakewood 3% property tax rates, that will generate .03x$34,000,000=$1,020,000 per year, and rise with inflation.
At D200 tax rates of 4%, that will generate .04x$34,000,000= $1,360,000 per year, and rise with inflation.
6. As years pass and tax rates rise for D200 taxpayers, the tif annual profit for Lakewood will rise, and the D200 taxpayer LOSS (cost paid for Lakewood students) will rise.
7. To recap: Lakewood will be getting $1 to $1.3 million per year as D200 taxpayers will be obligated to PAY at least $540,000 per year in order for Lakewood to achieve that.
As years pass, Non-Lakewood taxpayers will need to pay more, and Lakewood tif will get more.
I’d like to provide some information on affordable housing.
The IHDA, Illinois Housing Development Agency, manages the affordable housing program. Their website has some slightly misleading information it.
They publish a document, 2014 Owner-Occupied and Rental Unit Affordability Charts, at
http://www.ihda.org/government/documents/2014AffordabilityCharts.pdf
that implies affordable housing prices range from $112K to $212K depending on occupancy and affordable rents range from $760 to $1390/month, again, depending on occupancy.
This document is misleading.
This is important.
Building residences to these price points will not affect the percentage of affordable housing in Lakewood.
The IHDA uses a formula with median salary, median property taxes, and average mortgage rates as inputs to calculate what an affordable residence costs or rents for.
These price points, below which a unit is deemed affordable by the IHDA, vary across the county.
For Lakewood, an affordable owner occupied residence sells for $84,244 and an affordable rent for an apartment is $916.
The methodology is explained well in the “Affordable Housing Planning and Appeal Act: 2013 Non-Exempt Local Government Handbook” from the IHDA website.
The data used in the calculation is available at the US Census Bureau website
http://www.americanfactfinder.com, though it’s well buried.
Let me restate this.
Unless a residence sells for less than $84,244, it is not considered affordable and does not count toward Lakewood’s affordable housing stock.
Very rarely do you see residences listed in the real estate section of the newspaper that sell for less than this price.
In fact, I dont believe its even possible to build a single family residence for this price so the developer will be taking a loss on each affordable residence built unless steps are taken to minimize costs such as constructing duplexes, quads, row houses, apartments, etc.
These are the types of buildings you’ll most likely see being built, not estates.
Finally, here is the data that the IHDA uses for the affordability calculation, all taken from the Census Bureau.
The IHDA last updated the “non-exempt” list in 2013 using the census 2011 dataset.
The affordable housing act was recently amended to move to a 5 year update cycle.
It has been updated yearly up to 2013 but so far, the list has not yet been updated for 2014 and might not be updated again until until 2018.
Lakewood Median Property Taxes: $9,829
Lakewood Median House Price: $458,400
Occupied Housing Units: 1367
Existing Affordable Units: 21
Existing Affordable Rental Units: 17
Total Affordable Units: 38
Existing Affordable Percentage: 2.7%
Affordable Units needed to reach 10% Affordability: 79
The IHDA affordability formula has changed in the past and may very well change in the future at the next scheduled update, but as it stands now, these are the numbers.
Thank you Susan, for pointing that out.
I have always known Cal to be honorable (if a little slow on the uptake at times).
I do not know Steve at all.
From what we have been seeing here, we can rest assured that we have our own homegrown Paul Reveres right here and now.
Good to know; but this is not a time to rest on those laurels.
Time to muster.
Add to the Woodstock District 200 debt both the current year State contribution to the Teachers Retirement Insurance Program (TRIP) retiree healthcare fund, and the unfunded liability for that fund.
Retiree Healthcare falls into the Other Post Employment Benefits (OPEB) category.
Active teachers contribute to TRIP, retired TRIP members pay TRIP premiums, school districts contribute some, the taxpayers cover most the the rest (Medicare covers a small portion).
TRIP has been in place for decades and is administered by the Department of Central Management Services (CMS).
CMS took over administration from TRS due to mismanagement of the program.
TRIP has several offerings, the most popular being Teachers Choice Health Plan (TCHP).
The name of the fund is Teachers’ Health Insurance Security Fund (THIS).
A July 3, 2014 IL Supreme Court decision known as Kanerva vs Weems interpreted a sentence added to the the Illinois State Constitution on December 15, 1970 to mean the retiree healthcare benefits of State Retirement Systems (which includes TRIP) are contractual and cannot be diminished or impaired.
Read about that decision here.
Reboot Illinois
Truth in Accounting: Illinois budget tricks have hidden true cost of Kanerva v. Weems decision
by Sheila Weinberg
July 7, 2014
http://www.rebootillinois.com/2014/07/07/uncategorized/sheila-weinberg/truth-accounting-illinois-budget-tricks-hidden-true-cost-kanerva-v-weems-decision/19999
And here is the sentence added to the 1970 Illinois State Constitution at the 1970 Illinois State Constitutional Convention.
Illinois State Constitution
Article XIII – General Provisions
Section 5. Pension and Retirement Rights
Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the
benefits of which shall not be diminished or impaired.
http://www.ilga.gov/commission/lrb/conmain.htm
One may not always agree with Cal Skinner or Steve Willson, but no one can deny that both are men of public virtue.
Which is to say that they voluntarily sacrifice personal benefit for the good of society.
Without men of public virtue, the United States would never have come to exist.
Illinois Department of Revenue
Report on the Feasibility of Printing Tax Increment Financing (TIF) District Information on
Individual Tax Bills
Submitted to Governor Rod R. Blagojevich
and
the Illinois General Assembly
in Response to Public Act 95-227
August 2008
http://www.revenue.state.il.us/LocalGovernment/PropertyTax/TaxIncrement.pdf
Reading the Illinois Compiled Statutes, I find a section 74.4 q 7.5 which I think says that the costs-per-pupil may be recouped by a school district UP TO A LIMIT of either: 25% of tax increment revenue per student/household (or maybe 40% of tax increment revenue per student/household), if the School Board signs a paper waiving rights (to sue for more? or to sue to invalidate tif entirely based on statutory ineligibility, being a golf course and farmland and Lakewood not being in the school district at present?).
Is this like “being forced to VOLUNTARILY ” sign a waiver for an insurance check that is far below the amount of your damages, but you can’t afford NOT to sign because you’ll be destitute without some meager compensation?
25% of a 4% tax on $85,000 “affordable housing” which Lakewood is required to build SOMEWHERE, is $850 per year.
The cost per year to property taxpayers in D200 is $10,000 per student per year. (With .6 students per household presumed, $6000 per year per housing unit is presumed annual breakeven cost.)
We have 2 days until the gavel bangs and D200 has issued no statement and they are unreachable by email.
I just left a phone message.
(7.5) For redevelopment project areas designated (or redevelopment project areas amended to add or increase the number of tax-increment-financing assisted housing units) on or after November 1, 1999, an elementary, secondary, or unit school district’s increased costs attributable to assisted housing units located within the redevelopment project area for which the developer or redeveloper receives financial assistance through an agreement with the municipality or because the municipality incurs the cost of necessary infrastructure improvements within the boundaries of the assisted housing sites necessary for the completion of that housing as authorized by this Act, and which costs shall be paid by the municipality from the Special Tax Allocation Fund when the tax increment revenue is received as a result of the assisted housing units and shall be calculated annually as follows:
(A) for foundation districts, excluding any school district in a municipality with a population in excess of 1,000,000, by multiplying the district’s increase in attendance resulting from the net increase in new students enrolled in that school district who reside in housing units within the redevelopment project area that have received financial assistance through an agreement with the municipality or because the municipality incurs the cost of necessary infrastructure improvements within the boundaries of the housing sites necessary for the completion of that housing as authorized by this Act since the designation of the redevelopment project area by the most recently available per capita tuition cost as defined in Section 10-20.12a of the School Code less any increase in general State aid as defined in Section 18-8.05 of the School Code attributable to these added new students subject to the following annual limitations:
(i) for unit school districts with a district average 1995-96 Per Capita Tuition Charge of less than $5,900, no more than 25% of the total amount of property tax increment revenue produced by those housing units that have received tax increment finance assistance under this Act;
Any school district seeking payment under this paragraph (7.5) shall, after July 1 and before September 30 of each year, provide the municipality with reasonable evidence to support its claim for reimbursement before the municipality shall be required to approve or make the payment to the school district. If the school district fails to provide the information during this period in any year, it shall forfeit any claim to reimbursement for that year. School districts may adopt a resolution waiving the right to all or a portion of the reimbursement otherwise required by this paragraph (7.5). By acceptance of this reimbursement the school district waives the right to directly or indirectly set aside, modify, or contest in any manner the establishment of the redevelopment project area or projects;