Lakewood Does Better at Permanent Tax Cutting Than County Government and Algonquin Township, But Half of Next Year’s Tax Cut Can Be Reinstated

Lakewood’s Village Board voted to cut next year’s property taxes by 10%, but half of the cut can be reinstated next year.

Five percent was unanimously voted to be cut from the tax levy.

That is a permanent cut equal to the five percent levy cuts voted by the Algonquin Township Board.

Another five percent of this year’s levy was abated.

That totals 10%.

The McHenry County Board, on the other hand, while cutting next year’s tax take by 11.2%, reserved the authority to reinstate the entire 11.2% for the next year.

The McHenry County Board did not cut its levy permanently.

Lakewood Village Trustee Patrick Rexroat wrote the following about the meeting:

It was a unanimous vote to reduce the levy 5% and abate 5%. The total reduction residents will see is 10% I think the entire board was happy with that decision, although at least one or two probably wanted the full 10 cut.
Voting: Rexroat, Richie via phone, Stephan, Oden, Davis, McMahhon

To try and capture the ‘why’….but I’m not speaking on behalf of anyone…this is my opinion but parts of this were echoed by other board members:

Paul mentioned that abatement can be synonymous with deceiving tactics or shell games.

The board certainly does not want anyone to read that into this decision.

We are not playing shell games.

I think it’s clear to most folks that’s not what this is about.

Splitting the reduction to 5% permanent and 5% abated is premised on being cautious with so many moving parts in one year:

Consolidation of positions, a new CAO and almost a complete change of the Trustees.

Our new CAO, Jeannine Smith has been on the job less than 30 days; let’s give her a chance to comb through the budget and become more comfortable with our village and finances before making too deep of a permanent cut.

Next year, if the numbers favor an additional cut, we can make the 5% permanent, or go a bit lower or even higher if warranted or perhaps using some cash to pay down debt.

By voting for this decrease, we hope to set an example for other taxing bodies around the county and state to follow suit if they can look for ways to remove unnecessary tax burdens on Illinois residents.

This is Village Trustee Jason McMahon’s take on the action:

All Trustees were present for the meeting with Rick Ritchie attending via telephone for personal family reasons.

Two options were presented,

  1.  10% cut to the levy or
  2.  5% cut to the levy along with a potential 5% abatement after completing the budget process.

After some discussion with regard to the preliminary budget numbers used to outline a 10% levy reduction, the Trustees generally agreed it was prudent to err on the side of caution.

We agreed a 5% levy reduction would be possible.

However, we believed the new CAO needed additional time to thoroughly review the budget numbers, debt structure and contractual obligations as well begin to create a capital plan for maintaining and improving the Village’s assets and infrastructure prior to such a significant and permanent reduction.

The Trustees voted unanimously to approve the second option.

I left the meeting feeling a renewed sense of cooperation among the Board.

Residents were largely in favor of cutting the levy to reduce taxes, however, a couple residents urged caution considering the ongoing storm water issue in the Gates area.


Comments

Lakewood Does Better at Permanent Tax Cutting Than County Government and Algonquin Township, But Half of Next Year’s Tax Cut Can Be Reinstated — 2 Comments

  1. It is useful to understand the debt and obligations (bonds, unfunded pension liabilities, loans, leases, past due bills, etc.) in addition to the property taxes / property tax cuts.

    Here is a comment about the Village of Lakewood debt as of the FY 2016 AFR.

    http://www.mchenrycountyblog.com/2017/12/10/serwatka-proposes-10-property-tax-cut-in-lakewood/#comment-474361

    +++++++++

    The link to the Lakewood 2017 – 2018 Employee Compensation Report is broken.

    village.lakewood.il.us/index.asp?SEC=A1424B96-FB80-4AB0-AD2F-3B411927BD7A&

    ++++++++++

    Instead of URLs containing a bunch of letters and numbers it would be more user friendly for the Village to post paths and plain English URL’s such as done by the County.

  2. Per the Village of Lakewood FY 2017 AFR (FY ends April 30th):

    The IMRF unfunded liability (net pension liability) for the village is $658,973 and is 88% funded (12% unfunded), per pdf page 36 (hard copy page 31).

    The Village’s unfunded liability recent history:

    FY 2017 – %658,973

    FY 2016 – $825,342

    FY 2015 – $570,901

    +++++

    Recent total debt outstanding history of the Village:

    April 30, 2017 – $10,194,198.

    April 30, 2016 – $8,464,883.

    April 30, 2015 – $8,653,419

    Why the increase in FY 2017?

    “The key factor in this increase was a new Illinois EPA loan for construction of the East Sewer.”

    That is per pdf pages 11 & 12 in the Village’s FY 2017 AFR, and pdf page 11 in the FY 2016 AFR.

    +++++++

    The breakdown of the debt:

    Debt – 2017 – 2016 – 2015

    Refunding Bonds – $6,006,944 – $6,058,718 – $6,060,492

    General Obligation Bonds – $41,203 – $80,609 – $118,015

    Alternative Revenue Source Bonds – $1,753,550 – $1,823,193 – $1,892,835

    Loans Payable – $2,333,891 – $439,485 – $494,771

    Lease / Purchase Agreements – $58,610 – $62,879 – $87,306

    ++++++

    Police in the Village of Lakewood participate in the IMRF pension fund (there is no Downstate Police pension fund in the Village).

    IMRF benefits are not as lucrative as Downstate Police pension fund benefits.

    Police in smaller municipalities are in IMRF instead of a Downstate Police pension fund.

    ++++++

    Fire protection in the Village of Lakewood is provided by the Crystal Lake Fire Rescue Department, which is part of the City of Crystal Lake.

    village.lakewood.il.us/index.asp?SEC=B6D8AB26-8B36-47E1-A763-05B2B8845368&Type=B_BASIC

    +++++++

    The Village’s financial documents are located at:

    http://www.village.lakewood.il.us > Staff Directory > Departments > Finance

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