McHenry County Blog

Yesterday, I explained how a local government dependent on property taxes could reasonably argue that it needed to keep a bank balance high enough to allow it to get from the end of its fiscal year to when real estate taxes are distributed in May and June.

But the City of Crystal Lake collected under $1.8 million in property taxes in 2007. You can enlarge the image by clicking on it.

That’s out of over $18.5 million in total revenue for its general fund accounts.

So, less than 10% of Crystal Lake’s city revenues come from real estate taxes.

$150,000 a month.

Virtually a rounding error. Certainly no justification for keeping a $15-$17 million end of year balance in the bank or to raise city sales taxes by 75%.

Then, there’s the $11.2 that came from sales taxes. Checks come every month.

Again, no reason to keep a $15-17 million bank balance or to raise city sales taxes by 75%.

Over $3 million came from month checks resulting from the city share of the state income tax.

Regular payments, so no justification for an end of year balance.

And, another big item, telecommunications’ taxes brought in $1.9 million, again, deposited monthly. No need to accumulate money to wait until one or more lump sums showed up.

Look closely at how much revenue was collect in comparison to the amount expected.

Add the bottom two lines of this page from the 2007 audit together

$900,000 more was collected than predicted to be raised.

So, what is the justification for keeping almost 75% of a year’s budget in the bank?

And, what is the justification for Mayor Aaron Shepley’s and his city council majority having raised the city sales tax by 75%.

When a government has more money than it needs, taxpayers ought to ask

Certainly, conservatives think individuals can better decide how to spend the money they earn than governments.

I am under no illusion that many, if any, Crystal Lake taxpayers are willing to spend any time taking on an overtaxing city hall.

But, I did think readers ought to be able to see what’s not in the city’s financial records to justify Mayor Aaron Shepley’s 75% city sales tax increase.

Yesterday, I explained how a local government dependent on property taxes could reasonably argue that it needed to keep a bank balance high enough to allow it to get from the end of its fiscal year to when real estate taxes are distributed in May and June.

But the City of Crystal Lake collected under $1.8 million in property taxes in 2007. You can enlarge the image by clicking on it.

That’s out of over $18.5 million in total revenue for its general fund accounts.

So, less than 10% of Crystal Lake’s city revenues come from real estate taxes.

$150,000 a month.

Virtually a rounding error. Certainly no justification for keeping a $15-$17 million end of year balance in the bank or to raise city sales taxes by 75%.

Then, there’s the $11.2 that came from sales taxes. Checks come every month.

Again, no reason to keep a $15-17 million bank balance or to raise city sales taxes by 75%.

Over $3 million came from month checks resulting from the city share of the state income tax.

Regular payments, so no justification for an end of year balance.

And, another big item, telecommunications’ taxes brought in $1.9 million, again, deposited monthly. No need to accumulate money to wait until one or more lump sums showed up.

Look closely at how much revenue was collect in comparison to the amount expected.

Add the bottom two lines of this page from the 2007 audit together

$900,000 more was collected than predicted to be raised.

So, what is the justification for keeping almost 75% of a year’s budget in the bank?

And, what is the justification for Mayor Aaron Shepley’s and his city council majority having raised the city sales tax by 75%.

When a government has more money than it needs, taxpayers ought to ask

Certainly, conservatives think individuals can better decide how to spend the money they earn than governments.

I am under no illusion that many, if any, Crystal Lake taxpayers are willing to spend any time taking on an overtaxing city hall.

But, I did think readers ought to be able to see what’s not in the city’s financial records to justify Mayor Aaron Shepley’s 75% city sales tax increase.

Governments financed primarily by property taxes need to be able to make it to the county treasurer’s distribution date for the first installment

When I was McHenry County Treasurer in the late 1960′s, I distributed money every week from the time the bill were sent out. I even advanced some money to a couple of districts who needed it.

My predecessor had let the money accumulate in a checking account until sometime in mid- to late June. (Bills were due on June 1st.) The last year I invested the float in the Collector’s Account on an overnight basis.

The property tax provides two big shots of money, even if a county treasurer doesn’t distribute the real estate taxes as they are paid.

So,

1. if a district’s fiscal year ended on April 30th, as does Crystal Lake’s, and
2. if property taxes were a significant revenue source,

the tax district would want to have enough money in the bank to tide it over until the distribution checks started flowing.

If McHenry County Treasurer Bill LeFew is still following the distribution pattern I initiated over forty years ago, that would mean our April 30th fiscal year end district would not need much money in the bank to tide it over until property tax checks started arriving.

Certainly no more that one-eight of a year’s spending—enough to last a month and a half or until mid-June.

In Crystal Lake’s case, with its $22 million 2007-08 budget, that would mean keeping less that $3 million in the bank.

Crystal Lake, as was discussed in yesterday’s article, has had a $15 to over $17 million in the bank for the last four years.

Tomorrow: Implications of Crystal Lake’s Huge Bank Balance

Governments financed primarily by property taxes need to be able to make it to the county treasurer’s distribution date for the first installment

When I was McHenry County Treasurer in the late 1960′s, I distributed money every week from the time the bill were sent out. I even advanced some money to a couple of districts who needed it.

My predecessor had let the money accumulate in a checking account until sometime in mid- to late June. (Bills were due on June 1st.) The last year I invested the float in the Collector’s Account on an overnight basis.

The property tax provides two big shots of money, even if a county treasurer doesn’t distribute the real estate taxes as they are paid.

So,

1. if a district’s fiscal year ended on April 30th, as does Crystal Lake’s, and
2. if property taxes were a significant revenue source,

the tax district would want to have enough money in the bank to tide it over until the distribution checks started flowing.

If McHenry County Treasurer Bill LeFew is still following the distribution pattern I initiated over forty years ago, that would mean our April 30th fiscal year end district would not need much money in the bank to tide it over until property tax checks started arriving.

Certainly no more that one-eight of a year’s spending—enough to last a month and a half or until mid-June.

In Crystal Lake’s case, with its $22 million 2007-08 budget, that would mean keeping less that $3 million in the bank.

Crystal Lake, as was discussed in yesterday’s article, has had a $15 to over $17 million in the bank for the last four years.

Tomorrow: Implications of Crystal Lake’s Huge Bank Balance

So, I went looking for Crystal Lake’s audit at the Crystal Lake Library.

As I wrote earlier, it wasn’t there, even though the very same audit included the audit of the library itself.

So, over to city hall I went.

I’ve looked at a lot of audits in my life. I served on the Legislative Audit Commission in the 1970′s. I even looked at some in the 1970′s for the City of Crystal Lake at the old city hall before it was sold off without public bidding.

Selling off public property without public bidding seems to be popular in McHenry County, by the way. That’s how the county board sold the old highway department building and the western part of the county fairgrounds. That’s where the Jewel shopping center is.

But, back to the most recent audit.

I was wondering how dire the city’s financial circumstances were.

The city must have been in real trouble for the majority of the city council to follow Mayor Aaron Shepley’s lead and hike the city sales tax 75%, wouldn’t you think?

So, click on the page that I have posted here. It’s a summary page entitled

Look at the bottom line.

No really.

It’s not a figure of speech. It’s where you see how much money the city had at the end of April, 2007. Click on the image and enlarge it.

The estimate listed is almost $16.6 million.

The year before it was $17.6 million.

The year before that $15.7 million.

Looks pretty healthy, doesn’t it? Especially, when one looks at the annual budget of $21-22 million.

At the end of April this past year, the city was projecting it would have almost $15 million in the bank.

A bit of a drop, but, hey, that’s what you hire a professional city manager and staff for.

Economize.

Make the expenditures match the revenue.

But Mayor Shepley declared, “…there is no waste.”

Mayor Shepley and all but one councilman, Jeff Thorsen, took the easy way out.

They raised taxes.

And that easy way out is exactly what Mayor Shepley and his followers on the city council did.

They voted for a sales tax hike that is estimated to bring in an extra $4.7 million.

Even if there were a $1 million short fall, why hike taxes by almost $5 million?

Oh, I forgot.

Lots of the money is going to be used for the very same purpose for which the Route 14 Vulcan Lakes Tax Increment Financing District was passed—developing recreational opportunities at Vulcan Lakes.

More will go to a senior citizen center.

Now that I’m a senior citizen, I’m trying to figure out why I need a center.

What else?

It must be so unimportant I can’t remember.

Looking it up, I see there was $100,000 for economic development. Anyone want to bet that pittance won’t offset the negatived economic incentives of the 75% city sales tax hike?

Oh, I forgot.

The “I Shop Crystal Lake” stickers will make the difference.

Tomorrow: How large should the end of year balance be for Crystal Lake?

So, I went looking for Crystal Lake’s audit at the Crystal Lake Library.

As I wrote earlier, it wasn’t there, even though the very same audit included the audit of the library itself.

So, over to city hall I went.

I’ve looked at a lot of audits in my life. I served on the Legislative Audit Commission in the 1970′s. I even looked at some in the 1970′s for the City of Crystal Lake at the old city hall before it was sold off without public bidding.

Selling off public property without public bidding seems to be popular in McHenry County, by the way. That’s how the county board sold the old highway department building and the western part of the county fairgrounds. That’s where the Jewel shopping center is.

But, back to the most recent audit.

I was wondering how dire the city’s financial circumstances were.

The city must have been in real trouble for the majority of the city council to follow Mayor Aaron Shepley’s lead and hike the city sales tax 75%, wouldn’t you think?

So, click on the page that I have posted here. It’s a summary page entitled

Look at the bottom line.

No really.

It’s not a figure of speech. It’s where you see how much money the city had at the end of April, 2007. Click on the image and enlarge it.

The estimate listed is almost $16.6 million.

The year before it was $17.6 million.

The year before that $15.7 million.

Looks pretty healthy, doesn’t it? Especially, when one looks at the annual budget of $21-22 million.

At the end of April this past year, the city was projecting it would have almost $15 million in the bank.

A bit of a drop, but, hey, that’s what you hire a professional city manager and staff for.

Economize.

Make the expenditures match the revenue.

But Mayor Shepley declared, “…there is no waste.”

Mayor Shepley and all but one councilman, Jeff Thorsen, took the easy way out.

They raised taxes.

And that easy way out is exactly what Mayor Shepley and his followers on the city council did.

They voted for a sales tax hike that is estimated to bring in an extra $4.7 million.

Even if there were a $1 million short fall, why hike taxes by almost $5 million?

Oh, I forgot.

Lots of the money is going to be used for the very same purpose for which the Route 14 Vulcan Lakes Tax Increment Financing District was passed—developing recreational opportunities at Vulcan Lakes.

More will go to a senior citizen center.

Now that I’m a senior citizen, I’m trying to figure out why I need a center.

What else?

It must be so unimportant I can’t remember.

Looking it up, I see there was $100,000 for economic development. Anyone want to bet that pittance won’t offset the negatived economic incentives of the 75% city sales tax hike?

Oh, I forgot.

The “I Shop Crystal Lake” stickers will make the difference.

Tomorrow: How large should the end of year balance be for Crystal Lake?

That was the question that I and two Crystal Lake Library employees pondered last Wednesday.

I went to the library to look at the most recent audit.

The one that should have been finished sometime last fall.

The information lady was sure that it would be posted on the internet on the city’s web site.

Nope?

Wasn’t there.

She sent me back to the reference desk.

That librarian found the city budget.

But, the audit was no place to be found.

The helpful information desk librarian called city hall and told me she was transferred to three people before she discovered I could look at a copy, if I went to city hall.

So, I drove north and parked.

When I asked for the latest audit, the woman at the counter asked for my driver’s license.

I asked, “Why?”

She told me it would be returned when I returned the audit.

Bet I would not have had to surrender my driver’s license or even reveal my name had the city hall folks put their audit at the library.

I’m pretty certain that one of the librarians requested the audit, which, I discovered, also contains the library’s own audit. That’s because the library is a city library and serves no one outside of Crystal Lake…unless someone like me walks in and asks a reasonable question.

= = = = =
You can tell from the coats in the photo of the newly-remodeled library that it was not taken in mid-August. It was taken in May.

That was the question that I and two Crystal Lake Library employees pondered last Wednesday.

I went to the library to look at the most recent audit.

The one that should have been finished sometime last fall.

The information lady was sure that it would be posted on the internet on the city’s web site.

Nope?

Wasn’t there.

She sent me back to the reference desk.

That librarian found the city budget.

But, the audit was no place to be found.

The helpful information desk librarian called city hall and told me she was transferred to three people before she discovered I could look at a copy, if I went to city hall.

So, I drove north and parked.

When I asked for the latest audit, the woman at the counter asked for my driver’s license.

I asked, “Why?”

She told me it would be returned when I returned the audit.

Bet I would not have had to surrender my driver’s license or even reveal my name had the city hall folks put their audit at the library.

I’m pretty certain that one of the librarians requested the audit, which, I discovered, also contains the library’s own audit. That’s because the library is a city library and serves no one outside of Crystal Lake…unless someone like me walks in and asks a reasonable question.

= = = = =
You can tell from the coats in the photo of the newly-remodeled library that it was not taken in mid-August. It was taken in May.