VILLAGE OF
BUFFALO GROVE
TO:
DANE C. BRAGG
FROM:
SCOTT D ANDERSON
SUBJECT:
FY 2013 PRELIMINARY PROPERTY TAX LEVY
DATE:
3/15/2016
In conjunction with the development of the FY 2014 Village Budget, staff is currently working on a
recommendation for the FY 2013 Property Tax Levy (collected in 2014).
The current year’s levy (2012 Tax Levy) is $14,201,796 and was an increase of 1.16 percent from the
previous year’s levy request. The components of the change were:
 Corporate Levy
+1.5%
 Special Purpose/IMRF
+2.0%
 Public Safety Pensions
+1.38%
 Debt Service
-3.88%
For the FY 2014 Budget the following methodologies are contemplated.
Corporate Levy
Historically the amounts requested to support the core functions of government are based on
inflationary growth values published by American City & County as the Municipal Cost Index (MCI).
This index is then added to the previous year’s levy request. The MCI is a blended index that factors
for the Consumer Price Index, Producer Price Index, and other relevant inflationary indices applied to
how municipalities traditionally acquire goods and services. For the year ending August, 2013, the
cost index is 1.7 percent. This inflation growth will generate an additional $129,931 in property tax
revenue for general fund core service operations.
In addition to the increase for inflation, staff requests an additional 1.3 percent to help reduce the
current deficit in the General Fund. In conjunction with the property tax increase, staff has
implemented and increased other revenues, reduced staffing, and is evaluating a series of program
and services eliminations (deemed as Tier 3 expenditures) as explained in a memorandum by Deputy
Manager Maltas. The additional 1.3 percent would result in nearly $100,000 of additional revenue.
A proposed Corporate Levy of three percent would result in a three-year average growth of 1.39
percent per annum.
Debt Service
Last year’s debt service requirement was $1,321,300. In December 2013, the final principal and
interest payment will be made on the 2003 bonds. After the approval of a $419,000 tax abatement
the net property tax supported debt service amount was $902,300. Next year’s debt service is
$1,101,513. It is staff’s intention to abate approximately $200,000 of that levy to maintain level debt
service. There will be no growth in the debt service levy. The following is a summary of the Village’s
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debt position through FY 2030. Additional debt issuance is projected to occur by FY 2016 to refinance
the EAB line-of-credit.
Debt Service Schedule by Fiscal Year
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2012
2010B
2010A
Pensions
Both the Police and Fire Pension Fund annual required contributions are being calculated by the
Village’s independent actuary. Staff has received notification from the Illinois Municipal Retirement
Fund (IMRF) that the employer portion of the pension will increase .07 percent in 2014. The current
year’s levy for IMRF and employer FICA and Medicare cost was $1,600,793. The request for FY 2014
will be approximately $1,558,030 a reduction of 2.7 percent. The net decrease is $42,763.
For purposes of this analysis the public safety pensions are estimated to increase by 5 percent. Staff
should receive the final report and recommendations within the next several weeks. Applying five
percent growth nets additional levy amounts of $107,991 and $100,187 for the Police and
Firefighter’s Pension Funds, respectively. The total additional required amount for all pension levies
is estimated to be $165,415.
E.A.V
Over the last three years the equalized assessed value of property in Buffalo Grove has dropped 17.4
percent from $1.89 billion to $1.56 billion. Staff anticipates another year of decline in the range of
2.5 to four percent as the last wave of property value appeals are meted out. The decline in EAV, and
the unequal distribution of those declines, has put much pressure on the tax rate and resulting
property tax liabilities. Below is a graph depicting the growth, and decline, of EAV over the last ten
years.
Page 2 of 4
Equalized Assessed Valuation
2,000,000,000
1,800,000,000
1,600,000,000
1,400,000,000
1,200,000,000
1,000,000,000
800,000,000
600,000,000
400,000,000
200,000,000
0
2005
2006
2007
2008
Cook County
2009
2010
Total EAV
2011
2012
2013
2014
Lake Couty
Impact
The result of the increases noted above would result in a tentative levy, after abatements, of
$14,764,027 or 2.8 percent growth. The first hurdle in the process is the truth in taxation report. If
the Village’s tax levy request exceeds the prior year’s tax extension (less debt service levies) by more
than five percent the Village must publish for, and conduct a public hearing. Using the amounts
above, the increase would be under three percent. At this point in the process, staff anticipates the
tax levy (less abatements) to resemble the table below;
Village of Buffalo Grove
Preliminary Distribution of 2013 Property
Tax
After Tax Abatement Consideration
Cook County
Cook
Lake County
Lake
2013
Total 2012
Levy*
County
Levy*
County
Extension
Levy Request
23.08%
Rate (1)
76.92%
Rate (1)
100.00%
100.00%
Corporate
532,737.43
0.1324
1,775,483.67
0.1444
2,308,221.10
2,240,991.36
Street and Bridge
169,887.53
0.0422
566,193.61
0.0461
736,081.14
714,641.88
242,290.35
Tax Levies:
Street Lighting
57,598.23
0.0143
191,960.83
0.0156
249,559.06
Police Protection
127,733.62
0.0318
425,704.92
0.0346
553,438.54
537,318.97
Fire Protection
913,395.30
0.2271
3,044,123.31
0.2476
3,957,518.60
3,842,251.07
ESDA
3,047.52
0.0008
10,156.67
0.0008
13,204.19
12,819.60
12,537.15
0.0031
41,783.27
0.0034
54,320.42
52,738.27
1,816,936.78
0.4517
6,055,406.27
0.4925
7,872,343.05
7,643,051.50
359,594.00
0.0941
1,198,436.00
0.0975
1,558,030.00
1,600,793.10
0.00
0.0195
0.00
0.0000
0.00
330,400.00
Corp. Purpose Bonds Facilities (2010A)
114,413.33
0.4035
381,311.67
0.0310
495,725.00
483,638.00
Corp. Purpose Bonds Facilities (2010B)
61,915.10
0.0053
206,347.90
0.0052
268,263.00
88,263.00
Corp. Purpose Bonds Facilities (2012)
31,740.77
0.0000
105,784.23
0.0086
137,525.00
0.00
Police Pension
532,830.53
0.1296
1,775,793.97
0.1444
2,308,624.50
2,198,690.00
Fire Pension
490,107.69
0.1202
1,633,409.16
0.1329
2,123,516.85
2,022,397.00
3,407,538.20
0.7743
11,356,489.19
0.9121
14,764,027.39
14,367,232.60
Crossing Guard
Sub-Total:Corporate
IMRF/Social Security
Corp. Purpose Bonds Facilities (2003)
Total
Page 3 of 4
The components of the levy are distributed as follows;
Dollar
Percentage
Change
Change
2013 Request
2012 Request
Corporate
7,872,343.05
7,643,051.50
229,291.55
3.00%
Special Purpose - IMRF
1,558,030.00
1,600,793.10
(42,763.10)
-2.67%
Pension
4,432,141.35
4,221,087.00
211,054.35
5.00%
901,513.00
902,301.00
(788.00)
-0.09%
14,764,027.39
14,367,232.60
396,794.79
2.76%
Debt Service
Total
Over forty-two percent of the proposed growth in the levy is due to employer pension obligations.
Staff continues to monitor legislative movement in Springfield for substantive pension reform. Until
reform is passed, employer’s pension obligations will continue to drive most of the growth in the tax
levy requests.
One of the strategic goals set forth in FY 2013 was to present a tax levy that represents no more than
11 percent of the total property tax bill. That goal was attained in the current year’s tax levy.
Property Tax Distribution - 2013
County of Lake
7%
Buffalo Grove
11%
Township & Forest
Preserve
4%
Library
3%
Schools
69%
Park District
6%
The levy numbers are still tentative and will be further refined as the independent actuaries provide
the police and fire pension levies and the FY 2014 Budget process is completed.
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