Normal Mayor Chris Koos said the town is keeping a flat property tax levy and reducing the tax rate because elected officials don't want to contribute to a rise in the overall tax rate homeowners pay — and he thinks the levy will stay flat even if required pension payments rise.
“As we all know, a lion's share of the property taxes goes to the schools, and the schools desperately need that money right now. We're trying to be respectful of that,” Koos said on WGLT's Sound Ideas.
A flat levy combined with a significant 5.99% rise in overall assessments of property values in the town will produce a lower property tax rate likely to have a minimal effect on homeowners.
The town council intends to vote in December on a $13.4 million levy and reduce the tax rate from $1.45 to $1.36 per $100 assessed valuation. A public hearing will precede the vote. The town’s estimated EAV for 2022 is expected to be nearly $983.5 million — about 7.25% more than last year, finance director Andrew Huhn told the town council Monday night.
The town must come up to 90% funding of its public safety pension funds (police and fire) by the year 2040. Currently, the adequacy is rated far lower than that, as is true of most municipalities in the state. That has meant increasing required payments for years.
"We are taking money from the general fund to honor our pension obligations. It's not like we're walking away from what our actuaries are saying we need to pay annually to hit our goal," said Koos.
The stock market is down about 20% this year, which also affects return on investments in pension funds. Required contribution amounts are smoothed annually with a multi-year rolling average of investment returns. Even so, required contributions are going to increase because of the current downturn and with a potential recession arriving next year.
“It's a fluid situation. It just depends on the situation. If we have the ability to do what we're doing right now, we'll do that. And if we don't, we'll have to do something different. It just depends on the economy and our financial position. The path that will go forward is that our property tax levy will go to pensions,” said Koos.
Repair bids not what staff expected
On another topic, bids for repair of three buildings the town has an interest in were twice the amount expected. And the town does not even own one of them, the Immanuel Bible Foundation building on Fell Avenue. Koos said the town has an agreement with the foundation to pay half the costs of major repairs even without ownership.
"It's a landmark structure," said Koos. "It's a very large part of the history of the Town of Normal. It may be one of the finest examples of that period of architecture in our entire community. We value our heritage."
The agreement also gives the town the first right to purchase the building if the foundation ever sells it. Amounts the town has paid for repairs would go toward the purchase price if that happens.
The other buildings needing repairs are the Ecology Action Center, formerly Hewitt House, and the Sprague Service Station on Old Rt 66.
The town budgeted about $447,000 for repairs and the bids came in at more than $1 million. The council decided to see what can be accomplished with the budgeted amount and then decide how to pay for the rest. Koos said avoiding the repairs is not an option.
Even with the expensive repairs, Koos continues to support acquiring the buildings.
“I think they're all three very, very important structures to the history of Normal,” he said.
