City of Dekalb City Council met Oct. 25.
Here is the agenda provided by the council:
A. CALL TO ORDER AND ROLL CALL
B. PLEDGE OF ALLEGIANCE
C. APPROVAL OF THE AGENDA
D. PUBLIC PARTICIPATION
E. PRESENTATIONS
None.
F. APPOINTMENTS
1. Appointment of Julie Jesmer to the Citizens’ Environmental Commission for the Completion of a Two-Year Term through December 31, 2023.
G. CONSENT AGENDA
1. Minutes of the Special City Council Meeting of September 1, 2021.
2. Minutes of the Regular City Council Meeting of September 13, 2021.
3. Minutes of the Regular City Council Meeting of September 27, 2021.
4. Minutes of the Regular City Council Meeting of October 11, 2021.
5. Accounts Payable and Payroll through October 25, 2021, in the Amount of $3,619,257.97.
6. Investment and Bank Balance Summary through August 2021.
7. Year-to-Date Revenues and Expenditures through August 2021.
8. Freedom of Information Act (FOIA) Report – September 2021.
9. FY2021 Human Services Funding 3rd Quarter Report.
H. PUBLIC HEARINGS
None.
I. CONSIDERATIONS
1. Consideration of the Annual Property Tax Levy in the City of DeKalb.
City Manager’s Summary: The property tax is the most stable source of municipal revenues. What is levied is applied and generally distributed, assuming property owners pay their taxes. It is important to note the following, however:
a) None of the property taxes that the Council will levy in December 2021, payable in 2022, will be used for general operations. In addition, the $1,278,142 shortfall between the City’s levy and the actuarial obligations for 2022 will need to be drawn from other General Fund revenues or the General Fund reserve.
| CITY PENSION FUNDING AND PENSION OBLIGATIONS | ||||
| 2018 Actuarial Obligation | 2018 Levy
Funding | Difference* | % Difference | |
| Fire Pension | $3,503,332 | $3,220,517 | $282,815 | 8.07% |
| Police Pension | $3,079,438 | $2,796,623 | $282,815 | 9.18% |
| Total | $6,582,770 | $6,017,140 | $565,630 | 8.59% |
| 2019 Actuarial Obligation | 2019 Levy
Funding | Difference* | % Difference | |
| Fire Pension | $3,920,907 | $3,322,914 | $597,993 | 15.25% |
| Police Pension | $3,477,031 | $2,946,735 | $530,296 | 15.25% |
| Total | $7,397,938 | $6,269,649 | $1,128,289 | 15.25% |
| 2020 Actuarial Obligation | 2020 Levy
Funding | Difference* | % Difference | |
| Fire Pension | $4,282,230 | $3,569,403 | $712,827 | 16.65% |
| Police Pension | $3,614,881 | $2,953,053 | $661,828 | 18.31% |
| Total | $7,897,111 | $6,522,456 | $1,374,655 | 17.41% |
| 2021 Actuarial Obligation | 2021 Levy
Funding | Difference* | % Difference | |
| Fire Pension | $4,415,632 | $3,720,878 | $694,415 | 15.73% |
| Police Pension | $3,707,827 | $3,124,439 | $583,727 | 15.74% |
| Total | $8,123,459 | $6,845,317 | $1,278,142 | 15.73% |
b) According to DeKalb Township and County assessment officials, the projected 2021 City levy, payable in 2022, will capture the following new assessed values:
▪ Recovered Central Area TIF: In the 2020 Intergovernmental Agreement relating to tax increment financing districts in the City of DeKalb (dated November 15, 2020), the parties agreed that the last Central Area TIF annual surplus payment pertained to tax year 2020, with the last annual surplus payment paid by the DeKalb County Collector in 2021.
▪ With the termination of the Central Area TIF, the “recovered” TIF value is treated the same as new property. The 2021 tax year (with taxes payable in 2022) is the first year that the recovered TIF increment can be taxed. Under the Property Tax Extension Limitation Law (PTELL), the amount of the extension (total taxes billed) for non-home rule taxing districts is limited to an inflationary increase on the value of existing property, plus an additional amount for new construction. The inflationary increase is limited to the lesser of 5 percent or the increase in the consumer price index for the year preceding the levy year. PTELL does not apply to home rule units of government such as the City of DeKalb, but the City Council has been very mindful of the impact of their levy decisions in recent years. The “recovered TIF” value is estimated to be $59,148,535.
▪ Ferrara Distribution Center: (Parcel #08-35-300-012): Total 2021 EAV equals $17,547,861, but $44,165 of that EAV represents existing value. $17,503,696 in new EAV times 0.50 (50% abatement) equals $8,751,848 in abatement. The total EAV of $17,547,861 minus the $8,751,848 abatement equals the 2021 taxable EAV of $8,796,013.
▪ Ferrara Pack Center: (Parcel #08-35-400-009): The total EAV of $5,860,804 includes $18,987 in existing value. The abatement will equal $5,841,817 times 0.50 equal to $2,920,908.50. The total EAV of $5,860,804 minus the $2,920,908.50 abatement equals the 2021 taxable EAV of $2,939,895.50.
The combined taxable EAV for the Ferrara Distribution Center and Packaging Center in 2021 is $11,735,908.50. At the expiration of the 15-year term for the Ferrara distribution and packaging centers, 100% of the EAV will be taxable.
▪ Facebook: Although the 500-acre development has been annexed and zoned “Planned Development – Industrial” since March of 2020, the Afton Township Assessor has determined that, because no principal buildings have yet been occupied, the “developer’s exemption” still applies for the land, which has not been farmed since the fall harvest of 2018.
▪ Other: An estimated $3,200,000 in additional EAV tied to new construction across all other residential, commercial, and industrial projects.
Total Estimated 2021 New Construction: $74,084,443.50.
c) The tentative 2021 DeKalb Township multiplier is 1.0199. The 2020 EAV of $610,333,062 times the multiplier of 1.0199% = $622,478,690.
d) The projected 2021 City EAV is $696,563,133 (+14.13%).
e) A City levy of $6,845,317 would include only the City levy obligation for the Fire and Police pensions, and would not include the Library bond debt payment.
f) The resulting City tax rate of .98273 ($6,845,317 divided by $696,563,133) would be 8.04% lower than the 2020 rate of 1.06868 per $100 EAV.
The following table puts the proposed City tax rate of 0.98273 in the context of the recent history of City tax rates:
| Tax Levy
Year | Rate-Setting
EAV: City | City Levy | City Rate |
| 2011 | 582,504,715 | 4,196,890 | 0.7205 |
| 2012 | 533,805,903 | 4,244,718 | 0.7952 |
| 2013 | 485,923,623 | 4,270,457 | 0.9809 |
| 2014 | 464,966,381 | 4,270,540 | 1.0245 |
| 2015 | 468,077,742 | 5,094,730 | 1.1942 |
| 2016 | 503,861,829 | 5,565,384 | 1.2021 |
| 2017 | 529,629,464 | 6,004,594 | 1.2268 |
| 2018 | 547,947,687 | 6,017,140 | 1.1883 |
| 2019 | 585,726,839 | 6,269,649 | 1.1541 |
| 2020 | 610,333,062 | 6,522,507 | 1.06868 |
| 2021 | 696,563,133 | 6,845,317 | 0.98273 |
| Year | Base EAV | Twp
Multiplier | New EAV | Homestead | Final EAV | DeKalb
Rate | DeKalb Tax |
| 2019 | $97,906 | 1.0351 | $101,343 | -$6,000 | $95,343 | 1.1549 | $1,101.11 |
| 2020 | $101,343 | 1.0409 | $105,488 | -$6,000 | $99,488 | 1.06868 | $1,063.21 |
| 2021 | $105,488 | 1.0199 | $107,587 | -$6,000 | $101,587 | 0.98273 | $998.33 |
Finally, a word of caution: the continuing heavy burden imposed on DeKalb and other Illinois municipalities by a rising “ramp” in Fire and Police pension obligations imposed by the state legislature in 2011 will remain a fiscal drain in the next levy year. According to the 2011 pension compromise, a closed amortization period was created that requires all pension funds to be 90% funded on the arbitrary date of 2040. This approach builds in increasing levels of contribution beyond annual increases owing to such actuarial factors as the number of lives covered, the wage levels at retirement, mortality, disability, etc. If funding ratios are low (the average state-wide is around 55%), the additional funds needed each year rise significantly the closer we get to 2040. As of January 1, 2022, the funding levels of DeKalb’s Fire and Police Pension Funds are 40% and 50.2%, respectively.
This burden will continue until action downstate leads to reform of the actuarial cost method. Because of the COVID crisis, the two state-wide boards which are to handle the larger, consolidated investment pools to the advantage of local communities have not completed the consolidations anticipated by the Legislature in 2019. As a result, no relief in terms of reduced fund management costs has been realized. The City Manager is working collaboratively with the Illinois Municipal League and the Associated Fire Fighters of Illinois to press the state legislature and the recently consolidated state pension boards toward an actuarial cost method that can be sustained over time.
City Council direction is requested.
J. RESOLUTIONS
1. Resolution 2021-095 Authorizing the Equipping of Four Police Interceptor Vehicles Based on State Bid Contract Pricing in an Amount Not to Exceed $81,088.
City Manager’s Summary: At the regular Council meeting of September 27, the Council authorized the purchase of four (4) Ford Interceptor vehicles in an amount not to exceed $150,000 (Resolution 2021-086). This agenda item concerns the “upfitting” of those vehicles with light bars, in-car technologies, etc.
As Deputy Chief Leverton writes in the attached memorandum, the Police Department plans to deploy the four new vehicles in the following manner: two for ordinary patrol purposes, one as a K9 vehicle to accommodate an additional K9 that was recently acquired, and one as the Chief’s vehicle. The existing vehicles in those assignments will be passed on for use by School Resource Officers (SRO’s) and Community Service Officers (CSO’s). In turn, the current oldest vehicles being used by the SRO’s and CSO’s, being the last remaining 2008 and 2011 Ford Crown Victorias, will be retired from the fleet.
In outfitting these vehicles, all but the Chief’s vehicle will need a complete computer and camera system, which is provided by CDS Office Technologies, who holds the state bid for the provision of these technology items. The quoted price for outfitting three vehicles with the computer and camera systems is $41,088. Morrow Ford holds the state bid for the provision and upfitting of vehicles, which includes push bumper, emergency lighting, center console and controls, prisoner seat and partition, and other ancillary equipment. Morrow Ford provided a quote of $11,280 for an ordinary patrol vehicle. The K9 vehicle kennel and climate control system will add some cost, but the Chief’s vehicle only needs the basic items, so the total cost for the Morrow Ford provision is not expected to exceed $40,000.
City Council approval is recommended.
K. ORDINANCES – SECOND READING
1. Ordinance 2021-040 Amending the Municipal Code by Adding a New Chapter 46 “Citizen Police Review Board”.
City Manager’s Summary: At the last regular Council meeting of October 11, the Council postponed action on second reading to allow time for the Administration and representatives of the FOP Labor Council to reach agreement on several bargainable issues that arose in the discussion of the proposed Citizen Police Review Board. A tentative agreement has been reached and the membership of Lodge 115 will be reviewing the language and, ultimately, will have the opportunity to vote on the proposed amendments to the collective bargaining agreement between the FOP Labor Council and the City of DeKalb. Because the voting will not be complete until after this Agenda is published, the City Manager requests a final postponement of Ordinance 2021-040 on second reading until the regular City Council meeting of November 8.
L. ORDINANCES – FIRST READING
1. Ordinance 2021-043 Providing for the Termination of the Central Area Tax Increment Financing Redevelopment Area (TIF 1) and the Transfer of Funds from TIF 1’s Special Tax Allocation Fund to TIF 3.
City Manager’s Summary: Early in 2019 and continuing throughout 2020, City representatives worked with other local government officials serving on the TIF Joint Review Board to make DeKalb’s TIF program more transparent and accountable. A key result of this collaboration was an intergovernmental agreement dated November 15, 2020, in which the parties agreed that the Central Area Tax Increment Financing
District (TIF #1) would be terminated by the end of 2021. Parties to this agreement included the City of DeKalb, the County of DeKalb, the DeKalb Community Unit School District No. 428, DeKalb Township, the DeKalb Township Road and Bridge District, the DeKalb Park District, the DeKalb Public Library, the DeKalb County Forest Preserve, and the Kishwaukee Water Reclamation District.
On September 17, the City Manager mailed a letter to representatives of each of the participating taxing bodies to provide some guidance regarding the termination of the Central Area TIF District, including assistance as local taxing bodies prepare for their Fall 2021 levy decisions and the impact of the “recovered” TIF value. A copy of that letter is attached.
The last Central Area TIF annual surplus payment to the other taxing bodies pertains to tax year 2020, and the payment will be processed by the County of DeKalb in late 2021 or early 2022. The proposed FY2022 TIF #1 Budget will show this last surplus payment as an FY2021 expenditure. A residual FY2022 TIF #1 budget will be presented to the Council in November that retains a modest allocation ($21,778) for property assessment appeals that are pending before the Property Tax Appeal Board. Finally, the TIF #1 Fund (Fund 260) will transfer or “port” its remaining reserve to the City’s TIF #3 Fund (Fund 262).
The attached ordinance references all vital City enactments bearing on the creation and subsequent development of the Central Area TIF District. In approving this measure, TIF #1 as amended will be terminated as of December 31, 2021, and shall no longer be designated as a redevelopment project area under the TIF Act (Illinois Tax Increment Allocation Redevelopment Act, 65 ILCS 5/11-74.1-1, et seq.).
City Council approval is recommended. (Click here for additional information) M. REPORTS AND COMMUNICATIONS
1. Council Member Reports.
2. City Manager Report.
N. EXECUTIVE SESSION
1. Approval to Hold an Executive Session in Order to Discuss the Purchase or Lease of Real Property as Provided for in 5 ILCS 120/2(c)(5).
2. Approval to Hold an Executive Session in Order to Discuss the Appointment, Discipline, Performance or Removal of a Public Officer as Provided for in 5 ILCS 120/2(c)(3).
O. ADJOURNMENT
https://www.cityofdekalb.com/AgendaCenter/ViewFile/Agenda/_10252021-2077
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