11/20/2012 9:41:00 PM Unit #1 proposes 13 percent tax increase Levy seeks to maximize tax dollars, reduce debt
Ann Gill Editor
In presenting its tentative tax levy, the Unit #1 Board of Education announced its intent to maximize tax revenue in order to reduce long-term debt.
The board has placed on file a proposed levy that seeks $26.6 million for all funds, a 13 percent increase from the previous year. The increase seeks to maximize the tax dollars generated from Exelon Generation's Dresden Nuclear Power Station.
Unit #1 and six other taxing districts-Coal City Fire Protection District, Coal City Public Library District, Grundy County, Goose Lake Township, Goose Lake Township Road District and Joliet Junior College-are in the final year of a five year tax assessment agreement with the utility regarding the value of the power plant. Since taxes generated from the plant account for roughly 65 percent of district revenues, school officials are hopeful they can secure a new pact that would provide the district with some financial stability and consistent revenue.
"However until a new agreement is reached, District #1 faces new challenges centered on the instability of current and future revenues," said Dr. Kent Bugg, superintendent of Unit #1 Schools.
As Bugg points out this is not the first time the district has faced the challenge of an unstable and changing revenue stream.
"Nine years ago, the district was facing a drastic reduction in the value of the Dresden Nuclear Station due to the deregulation of the nuclear industry. Six years ago, District #1 faced the identical scenario to today when a five- year tax agreement expired. Each time the district has been faced with such potential changes and uncertainty in revenues, the board of education has garnered community input via the district Finance Committee," Bugg said.
During a recent meeting of the committee, presentations were given on the status of the district's long-term debt, the chances of reaching another long-term agreement with Exelon, as well as the power plant's long-term value and the district's long-term financial projections which take into account reductions in financial support from the state and declining home values.
Based on the information presented, the Finance Committee found it would benefit both the taxpayer and district to accelerate debt payments in an attempt to be out of debt prior to any potential future reductions in the assessed value of Dresden.
For the upcoming tax year, Grundy County Assessor Dave Henderson has set the taxable value of the power plant at $567 million. The figure is based upon appraisals submitted to his office by both Exelon and the impacted taxing bodies.
As reported last month, Exelon has filed a tax appeal seeking a reduction of over $194 million. The plant's final value heading into tax year 2012 will be determined by the Grundy County Board of Review when it convenes in early January 2013.
The value assigned by the Board of Review will likely still not be a final number, because the utility can appeal the determination of value to the Illinois Property Tax Appeal Board (PTAB).
Previous tax agreements have put an end to such appeals and provided financial stability to the district and utility.
In following the recommendation of the Finance Committee the board set the proposed levy, exclusive of bond and interest, at $23.59 million which would generate an additional $3 million over the previous year.
The levy placed on file Monday seeks $16,711,466.80 for the education fund, $3,561,219.57 for operations and maintenance, $1,683,100.20 for transportation, $317,966.03 for municipal retirement, $169,581.88 for working cash, $360,361.50 for social security, $339,163.77 for special education, $16,958.19 for life safety, $8,479.09 fin tort immunity and $423,954.71 for leasing.
The bond and interest levy was projected at $3,032,141,82. The funds are used to payoff the district's building project debt.
Since the proposed levy exceeds the previous year's tax extension by more than 105 percent, a Truth in Taxation must be held. The hearing will be held at the start of the board's Dec. 17 meeting. The board is expected to adopt the final levy during the meeting that follows the hearing.
The school district must file its levy with the county clerks in Grundy and Will counties prior to Tuesday, Dec. 25.