Oak Park School District 97, Cook County, IL

Transcription

1 Oak Park School District 97, Cook County, IL 12 Referendum Options March 16, 2010

2 Option I: Limiting Rate Increase April, 2011 A limiting tax rate increase, increases the total operating fund tax rate (or limiting rate) by an amount per $100. The current limiting tax rate is for levy year 2008 (taxes paid in 2009). Using FORC I projections, and anticipating $8,000,000 increase in operating funds (average deficit FY ), the tax rate increase needed is approximately $.48 per $100 ($144 on a $100,000 market value home). 13 If approved, the constraint of revenue growth to the CPI under Tax Caps is suspended, and the increased new tax rate is applied to the equalized assessed valuation. This can occur for one up to four consecutive years. Advantages: Directly increases the operating funds to the District, potentially funding the annual operating deficit. Funds can be allocated to any and all operating funds. Ability to amend the levy in Cook County in Spring of 2011 to access funds as soon as fall of 2011 (FY 2012). Long term sustainable solution (at a minimum 3-5 years) Ability to use Debt Service Extension Base bonds for capital projects instead of operations. Disadvantages: Increased burden to taxpayer. 2

3 Form of Limiting Tax Rate Question Shall the limiting rate under the Property Tax Extension Limitation Law for Oak Park School District Number 97, Cook County, Illinois, be increased by an additional amount equal to % above the limiting rate for levy year 2010 and be equal to % of the equalized assessed value of the taxable property therein for levy year 2010? 14 (1) The approximate amount of taxes extendable at the most recently extended limiting rate is $, and the approximate amount of taxes extendable if the proposition is approved is $. (2) For the 2010 levy year the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $. (3)If the proposition is approved, the aggregate extension for 2010 will be determined by the limiting rate set forth in the proposition, rather than the otherwise applicable limiting rate calculated under the provisions of the Property Tax Extension Limitation Law (commonly known as the Property Tax Cap Law). 3

4 Option II: CPI Override Question, April, 2011 Referendum question asks voter to accept a higher percentage increase in the aggregate extension base (operating funds levy) than allowed by CPI. Using FORC I projections, and anticipating $8,000,000 increase in operating funds (average deficit FY ), the CPI increase needed in 2010 levy year is approximately 22% per $100 versus 2.7% allowed under the Tax Cap (approximately $144 on a $100,000 market value home). 15 The same rate increase can be applied to multiple years in the future. Advantages: Directly increases operating funds of District, potentially funding the operating deficit. Funds can be allocated to any and/or all operating funds. Ability to amend levy in Cook County allows the District to access the 2010 levy extended firstly in Fall 2011, (FY 2012). Long term sustainable solution (at a minimum, 3 to 5 years). Ability to use Debt Service Extension Base bonds for capital projects. Debt Service Extension Base will increase by the revised CPI of 22% in this example as well. Disadvantages: Increased burden to the taxpayer both operating and DSEB increase Wording of referendum question can be misleading, causing the reader to infer that entire tax bill will increase 22%, not just District 97 portion 4

5 Option II: CPI Override Question, April, Shall the extension limitation under the Property Tax Extension Limitation Law for Oak Park School District 97, Cook County, Illinois, be increased from the lesser of 5% or the percentage increase in the Consumer Price Index over the prior levy year to % per year for (insert each levy year for which the increased extension limitation will apply up to 4 years)? (1) For the 2010 levy year the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $. (2) Based upon an average annual percentage increase (or decrease) in the market value of such property of % (insert percentage equal to the average annual percentage increase or decrease for the prior 3 levy years, at the time the submission of the question is initiated by the taxing district, in the amount of (A) the equalized assessed value of the taxable property in the taxing district less (B) the new property included in the equalized assessed value), the approximate amount of the additional tax extendable against such property for the 2011 levy year is estimated to be $.and for the 2012 levy year is estimated to be $. 5

6 Option III: School Building Bonds District puts a referendum question on the ballot for the issuance of school building bonds to be used for capital improvements, renovation, school additions, technology, grounds improvement and any other capital projects cannot be used for operations. 17 Currently the District has identified approximately $16M of high priority capital needs: $1M/Year Capital repair $6,000,000 Playground renovations 2,500,000 Ground repairs 2,000,000 Technology 5,500,000 Assuming debt is amortized over 10 years on a level debt service basis, $.15 per $100 of a tax rate increase or approximately $26 on a $100,000 market value home. Advantages: Takes care of high priority capital projects Debt Service Extension Base is available for operating fund taxable working cash bonds. Disadvantages: Even utilizing Debt Service Extension Base, does not resolve annual or accumulated structural operating deficits. 6

7 Option III: Form of the School Building Bonds Question 18 Shall the Board of Education of Oak Park School District Number 97, Cook County, Illinois, build and equip school buildings, improve the sites of and alter, repair and equip existing school buildings and issue bonds of said School District to the amount of $ for the purpose of paying the costs thereof? 7

8 Option IV: Referendum for Working Cash Fund Bonds District puts a referendum question on the ballot for the issuance of working cash fund bonds. The amount of the bonds should be sufficient to sustain the operating deficits for 3 to 5 years. Based on FORC I projections, the bond issue would be between $28M-$40M. 19 Assuming a 20 year level debt service taxable working cash fund bond issue for $40M, the estimated tax rate increase is $.23 per $100 and $72 on a $100,000 market value home. Advantages: Immediate influx of cash and potential interest earnings. Lower increase in the tax rate assuming 20 year bonds. Disadvantages: One time influx of funds does not cure an ongoing operating deficit - it actually masks the deficit problem. Operating deficit in FY 2015 projected to be $12M. The working cash fund bond proceeds will be spent well prior to the maturity of the bonds. Interest cost on taxable working cash bonds is an additional burden to the taxpayer. 8

9 Option IV: Form of Working Cash Fund Bond Question Shall the Board of Education of Oak Park Elementary School District Number 97, Cook County, Illinois, be authorized to issue $ bonds for a working cash fund as provided for by Article 20 of the School Code? 20 9

10 Option V-A: Increase Debt Service Extension Base District puts a referendum question on the ballot in April 2011 to increase the Debt Service Extension Base in levy year Debt Base would be increased from $3,089,625 to $11,289,625, allowing the District to issue limited tax bonds repaid within one year to fund the average operating deficit of $8,000,000 (FY ) according to the FORC I projection. 21 Assuming debt is amortized annually, $.43 per $100 of a tax rate increase or approximately $128 on a $100,000 market value home. Advantages: Addresses annual operating deficit; Debt base grows by CPI same as operating funds under the Tax Cap. Disadvantages: Indirect funding source for operations must issue debt. No capital project resources. Interest cost. 10

11 Option V-B: Increase Debt Service Extension Base District puts a referendum question on the ballot in April 2011 to increase the Debt Service Extension Base in levy year Debt Base would be increased from $3,089,625 to $13,289,625, allowing the District to issue limited tax bonds repaid within one year to fund the average operating deficit of $8,000,000 (FY ) according to the FORC I projection plus $2M annually for tech renewal ($1.5M) and playgrounds and grounds ($600,000). 22 Assuming debt is amortized annually, $.54 per $100 of a tax rate increase or approximately $160 on a $100,000 market value home. Advantages: Addresses annual operating deficit and capital needs; Debt base grows by CPI same as operating funds under the Tax Cap. Disadvantages: Indirect funding source for operations must issue debt. Interest cost. 11

12 Option IV: Form of Question Shall the debt service extension base under the Property Tax Extension Limitation Law for Oak Park School District 97, Cook County, IL for payment of principal and interest on limited bonds be increased from $3,089,625 to $ for the 2011 levy year and all subsequent levy years? 23 12

13 Outline For A Successful Referendum Election Day April 5, Establish Need for the Referendum Prepare Financial Projections Study Obtain Professional Assistance Involve Key Community Leaders and Citizen Support Staff Disseminate Information to Constituents Devise Financing Approaches Incorporating Tax Effects Build Board and Community Consensus Prepare Determine for the Ballot Election Language Devise Best Method to Organize and Staff the Election Effort Develop a Citizen Committee (s) for Marketing and Public Relations Efforts Research Voter Trends, Turnout and Voting Records Conduct Pre-Election Pool and Surveys Target Specific Voters in a Registration Drive Develop a Referendum Theme Prepare Campaign Literature 4/1/10 5/1/10 9/1/10 11/1/10 1/31/11 2/3/11 3/1/11 3/15/11 3/26/11 4/5/11 Election Day 4/6/11 Working the Campaign Petition to submit public question to Referendum must be filed with Board prior to Sunday January 31, 2011 to Place the Measure on the April 5, 2011 Ballot Certify Resolution by the Local Election Official Prior to February 3, Between March 6, 2011 through March 26, 2011 must post election notice in local community newspaper. District posts cop of Election Notice at District office no later than March 26, Follow-up with Voter Registration and Absentee Ballots for Potential Yes Voters Kick-off the Campaign with a Highly Publicized Event (December 2010) Obtain Media Support (December/January 2011) Monitor Staff s Door-to-door Efforts of Precinct Coverage ( December March 2011) Election Day Establish Phone Banks Establish Poll Watchers Question Voters Prior to entering the Polls for a Response on Referendum Update Polling Four Times Daily for Number of Voters Voting YES Get Out the Yes Vote Post Monitor Election Polls Day and Elections Celebrate with a Post Election party and Thank All Workers and Voters Review the Correlation Between projected Votes and Actual Votes Update Voter Lists and Prepare for Next Election Begin Process for the Implementation of the Tax Rate Increase

14 Legal Requirement for Initiating a Public Question REFERENDUM SCHEDULE 25 Date of Election Resolution Approval Deadline First Levy Year Impacted November 2, 2010 August 29, 2010* 2010 April 5, 2011 January 31, February 7, 2012 December 4, * Estimated, not confirmed 65 days prior to the election. 14