AGENDA MEMO

City Council

December 3, 2012

Issue Statement

Approval of an ordinance levying taxes for general and special corporate purposes for the fiscal year commencing on the first day of May, 2012, and ending on the thirtieth day of April, 2013, for the City of Darien, Illinois. ORDINANCE-TAX LEVY

Approval of an ordinance for the levy and assessment of taxes for the fiscal year beginning on the first day of May, 2012 and ending on the thirtieth day of April, 2013, in and for the City of Darien Special Service Area Number One known as Tara Hill. ORDINANCE SSA

Background/History

The process for setting a tax levy is to determine how much revenue to collect from the property tax, and request that the County levy a tax to generate that amount of money. The first approval required is the tax levy determination, which takes place prior to the approval of the tax levy ordinance. Not less than 20 days prior to the adoption of the aggregate levy, the Council shall determine the amounts of money to be levied. There are also special requirements if the aggregate amount of the levy is more than 105% of the preceding year. Unfortunately, we are still subject to a timing constraint that requires us to make our initial request by the end of December, a few months before we are far enough into the budget process to make a final judgment on what we will need. Nonetheless, we have approached the process this year with an underlying assumption that the Council will not increase property taxes for the combined general corporate purpose (general fund) and special corporate levy (police pension fund). Based on staff anticipating that assessed valuation will decrease city wide the tax rate will increase.

At the same time, the Council can approve additional abatements up to the end of March. This gives the Council the ability to request a “ceiling” amount, while allowing us to review the budget early next year and consider abatements to the original request. The council could also choose to levy a higher amount.

The attached ordinance requests a general corporate purpose (general fund) and special corporate levy (police pension fund) of $1,617,850 which represents a 0% increase over this year’s non-bond extension of $1,617,850. Since we anticipate a decrease in the assessed valuation city wide the tax rate may increase slightly, however property owners will pay the same total amount they paid last year. I determined the levy for the police pension fund based on the actuary report conducted on the Police Pension Fund.

With respect to the tax levy for Special Service Area #1, we have a plan for maintenance expenses for these wetlands and storm water infrastructure, and the recommended revenue from this levy is proposed to be maintained at $5,000.

Additionally, a levy for any outstanding bonds has been filed upon the adoption of the bond ordinances. The 2012 levy amount to pay for the principal and interest on these bonds totals $1,000,302. Lastly, any abatement will be presented in conjunction with our budget review.

Staff/Committee Recommendation

The Administrative/Finance Committee and Staff recommends approval of the levy determination and ordinances which:

· Set the City’s 2012 general property tax levy and special corporate tax levy (police pension fund) at $1,617,850

· Set the City’s 2012 Special Service Area I property tax levy at $5,000

Alternate Consideration

Levy different amounts.

Decision Mode

This final ordinance will be on the December 3, 2012, City Council agenda for formal consideration.