Some Facts You Probably Don’t Know about Crystal Lake and the Library Bond Referendum

This information was developed by commenter Mark:

A major reason property taxes are high is because property taxing districts omit pertinent details during bond advisory and bond referendums.

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Do not even think about voting yes for a bond or bond advisory referendum unless the estimated annual debt service schedule for the lifetime of the bonds is presented.

Automatic no vote.

Not debatable.

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In this case, the bond advisory referendum is for $30,100,000.

That’s principal only.

Interest is not included in the $30,100,000.

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Question as it will appear on the ballot:

“Shall bonds in the amount of $30,100,000 be issued by the City of Crystal Lake, McHenry County, Illinois, on behalf of the Crystal Lake Public Library, for the purpose of constructing a replacement library building adjacent to the existing library and acquiring necessary furnishings and equipment, which amounts to an estimated increase of $132 per year for a $200,000 home?

The question the Library wants to have on the Crystal Lake ballot in November.

The question the Library wants to have on the Crystal Lake ballot in November.

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$132 per year for a $200,000 home is for year 1.

Is year 2 $132 per year?

Year 3?

Year 4?

Year 5?

Year 6?

Year 7?

Year 8?

Year 9?

Year 10?

etc.

Does $132 increase in any year?

How many years is the homeowner obligated to pay $132?

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Next, what other debt and obligations does the City of Crystal Lake have?

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Are their existing bonds?

If so, what is that annual debt service schedule for the lifetime of the bonds?

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If there are existing bonds, compare the debt service schedules for existing bonds, to the debt service schedule to proposed bonds.

Sometimes existing bonds will decrease, proposed bonds will increase, resulting in taxes paid for bonds to either increase, remain flat, or decrease.

In other words, in terms of property taxes paid for city bonds, a third debt service schedule, including both existing bonds and proposed bonds should be developed.

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Did the city of crystal lake, library, or referendum group do that?

No.

Vote no for the referendum.

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Next subject, pensions.

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Squeezy the Pension Python (Pat Quinn administration idea) is present not only for state pensions (about a quarter of the state budget is for pensions) but for local pensions too.

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The City of Crystal Lake has 3 pensions.

  1. IMRF
  2. Police
  3. Fire

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Each of those pensions has an unfunded pension liability (taxpayer IOU to the pension fund).

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The Government Accounting Standards Board (GASB) issued Statement 68 which encourages governments to include the unfunded pension liability in their financial statements effective 2015 or so.

Rather than call it an unfunded liability, it’s called a net pension liability.

There are technical differences between the two, but they are close.

The City of Crystal Lake’s Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2015 (FY 2015) includes that information.

Here is the summary:

  • IMRF $9,750,453
  • Police $22,486,559
  • Fire $11,375,488

Total $44,612,500

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Recap:

The City of Crystal Lake has a $30.1 Million Dollar Advisory Bond Referendum on the November 8, 2016 ballot for a new library which it says will cost the taxpayer of a $200,000 home, $132 per year; but does not tell the taxpayer how many years they will have to pay that $132 per $200K home.

The City of Crystal Lake has not told what the interest on the $30.1 million bond will be.

The City of Crystal Lake has ? existing bond debt.

The City of Crystal Lake owes $44.6 to its pension funds.

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Since $44.6 Million is more than $30.1 Million, however much in total a taxpayer will pay for the library, more than double that to fully fund pensions.


Comments

Some Facts You Probably Don’t Know about Crystal Lake and the Library Bond Referendum — 9 Comments

  1. Looking at the City of Crystal Lake CAFR, the existing bond debt balance as of April 30, 2015 is $39,665,000.

    source: Page 41 of 212 pdf for FY 2015 CAFR.

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    SSA Bonds

    In addition, if you live in an SSA (special service area), there is additional bond debt, which as of April 30, 2015 is:

    Special Service Area number 44: $5,440,000
    Special Service Area number 45: $350,000
    Special Service Area number 46: $2,402,000
    SSA Total: $8,192,000

    source: page 41 of 212 pdf for FY 2015 CAFR

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    $39,665,000 + $8,192,000 = $47,557,000 (remember $8.192M of that is for SSA).

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    Next, page 82 of 212 pdf FY 2015 CAFR.

    This section of the CAFR separates City financials into two distinct areas: Governmental Activities and Business-type activities.

    Governmental Activities, General Obligation Bonds: $16,234,119
    Business Type Activities, General Obligation Bonds: $23,420,881
    Total: $39,665,000

    That matches the above figure.

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    Page 82 of 212 pdf (continued)

    “Net Pension Obligation” also appears on this page.

    The figure of $2,307,252 is presented.

    That would be the current FY 2015 pension contribution.

    We know from above the unfunded liability (net pension obligation) figure is $9,750,453.

    So when reading “net pension obligation”, find out if they are referring to the unfunded liability (taxpayer IOU), or the employer’s current year contribution to the pension fund.

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    Page 82 of 212 pdf (continued)

    Indicates bond premium, compensated absences, OPEB (typically retiree healthcare), and other taxpayer IOU’s or future taxpayer obligations.

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    page 84 of 212 pdf:

    The debt service schedule is listed here, including principal an interest.

    Unfortunately instead of listing one row per year, after year 2020, there are three groupings: years 2012 – 2025, years 2026 – 2030, and years 2031 – 2035.

    That groupings should be replaced by individual years.

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    page 84 of 212 pdf

    Governmental Activities Principal – $16,234,119
    Governmental Activities Interest – $5,803,417
    Business-type Activities Principal – $23,420,881
    Business-type Activities Interest – $6,338,889

    Total Bond Principal and Interest outstanding: $51,797,306 as of April 30, 2015.

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    $51,797,306 existing bond debt as of April 30, 2015.

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    Taxpayers owe $51,797,306 for bond principal and interest as of April 30, 2015.

    The advisory referendum is for $30,100,000 additional bonds principal only.

    If the bond were to pass, taxpayers would owe an estimated ? for bond interest.

    Crystal Lake taxpayers owe $44,600,000 (approximately) to Crystal Lake pension funds.

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    So what’s the plan to pay for all that:

    – if the advisory referendum is unsuccessful

    – if the advisory referendum is successful.

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    Where is the annual bond debt service schedule for principal and interest (no groupings of years, list each year individually).

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    How about an estimated amount for $200,000 house to pay exiting bonds?

    Since an estimated amount can be developed for bonds that have not yet been issued, certainly and estimated amount can be developed for bonds that have been issued.

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    How about a taxpayer payment schedule to fully fund pensions?

    Certainly if an estimated amount can be developed for bonds not yet issued, an estimated amount can be developed for exiting pension IOUs (money that should be in the pension fund right now but is not).

  2. From the bottom of the post:

    The City of Crystal Lake has ? existing bond debt.

    The answer is $51,797,306 as of April 30, 2015, and that includes bond principal and interest.

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    Let’s add it up.

    Currently Crystal Lake taxpayers owe to the City of Crystal Lake:

    Existing Bonds – $51,797,306 (principal and interest)

    Pension Unfunded Liability – $44.6M (roughly net pension liability)

    Total $96,397,306

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    If the referendum is successful, add $30,100,000 principal only (what’s the estimated interest):

    Existing Bonds – $51,797,306 (principal and interest)

    Pension Unfunded Liability – $44.6M (roughly net pension liability)

    Referendum Bond Principal – $30,100,000

    Referendum Bond Interest?

    Total: $126,497,306 + bond interst

  3. Another point to remember about referendum bonds.

    Referendum bonds fall outside the tax cap.

    Meaning, if referendum bonds are present, property taxes can increase more than the tax cap.

    So property taxes to the City of Crystal Lake can legally increase by the lesser of 5% or CPI, plus Bond payments.

    Thus, property taxes to pay for referendum bonds are exempted from the tax cap.

    An exception to the rule.

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    The property tax extension (billings) can also increase by the amount of new growth, but that presumably wouldn’t increase the property taxes of those parcels outside the new growth.

  4. A BIG SHOUT OUT to the Crystal Lake new
    Library group & JIM HIESLER (county board
    Member) who wants an expensive government
    Building project in the near future TOO !

    LOOK at the BIG PICTURE here and learn to
    Live with what we have instead of SPENDING
    OTHER PEOPLE’s money in this OVERTAXED COUNTY.

  5. $250 – Jeffrey & Carol Heisler, Crystal Lake
    For Pete sake learn to friggin read.

  6. Crystal Lake Library Board of Trustees

    Terri Reece, President

    William Weller, Vice President

    Carol A Heisler (Carol Heisler), Treasurer

    Charles K Ebann (Charles Ebann), Secretary

    Ron Eberle

    John Engebretson

    Mary Alice Fellers (Mary Fellers)

    Donald G Peters (Donald Peters)

    Monica Szalaj

    Kathryn I. Martens (Kathryn Martens), Library Director

  7. The Crystal Lake Library is a component unit of the City of Crystal Lake.

    Thus, the Crystal Lake Library is not its own taxing district, rather, it’s part of the City of Crystal Lake taxing district.

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    The Crystal Lake City Council consists of the Mayor and six City Council members.

    Mayor Aaron T Shepley (Aaron Shepley)

    Ellen Brady

    Ralph Dawson

    Cathy Ferguson

    Haig Haleblian

    Brett Hopkins

    Cameron Hubbard

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    The City Clerk is Nick Kachiroubas

  8. Same family, Inish.

    Going to call out the
    BIG SPENDERS as often
    As possible, get used.to it.

    Jacko Franko has supported
    The Randall Road Project along with
    Other BIG SPENDERS and deserves
    Taxpayer DISDAIN for THAT TOO !

    Mark is trying to explain things here
    & SOME PEOPLE are incapable of
    Doing math & processing things.

    There is a BIG PICTURE here & the
    BIG SPENDERS need pressure to
    STOP the constant big projects
    In this overburdened & overtaxed
    County.

  9. The Heisler is not the County Board member who owns Heisler’s Bootery in Downtown Crystal Lake.

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