Public Safety Center
Nearly all the revenue associated with paying for the costs of this project are through borrowed funds over multiple years. Borrowed money is paid back through the debt service annually through an allocation from the tax levy. We have studied the tax impact of this project while reviewing the project's inclusion within our annual 5 Year Capital Improvement Program (CIP). The total amount of money needed to pay our debt each year is a portion of the overall levy needed to fund our operations. The Debt Service Fund has its own tax rate based on its share of the overall levy. Overall when you look at the next 5 years of our capital plans, the levy and the rate will climb accordingly based upon the schedules that are established. The current tax rate in 2021 needed to support Debt Service is $1.64 per thousand dollars of value and there after in 2022 the first increase hits at $2.09 /$1,000 followed by $2.37 per $1,000 (2023), $2.60 per $1,000 (2024), and $2.84 per $1,000 (2025) before leveling out and beginning to decline. The 5 year average on these increases from year to year is $0.27 per thousand of value. The homeowner with a median value home at $295,100 would expect to pay an additional $79 more per year for the duration of the current 5 year plan. At the very least even without the Public Safety Center, the projection to pay debt service to support capital needs over that same time period is an average annual increase on the debt service tax levy rate of $0.10 per thousand dollars of value which would equate to roughly $30 more per year for the duration of the current 5 year plan. The inclusion of the Public Safety Center within the CIP then adds about $49 per year over the life of the plan on average.
The above analysis represents the projected average over the next 5 years. Next year, however, will be the largest increase on the tax rate for debt service in the next 5 years. Current forecasts demonstrate an increase of $0.45 per thousand in value which on the median home will cost and additional $132.73 as it relates to the share of the tax levy needed to support debt service. After next year its more stable and about half of what that’s showing. Likely though what is demonstrated here through the average and projected for next year is a worst case scenario. Things that have yet to be factored in to help lower the tax burden include ways to diversify the revenue stream. We will be applying or exploring the following:
- Fund Balance – Sizeable fund balance within Debt Service that can help flatten the actual levy needed to pay down debt. Helps to step into increases versus taking them on all at once.
- Impact Fee – Studying impact fee for Public Safety Center which will offset the need for additional tax support if approved.
- Annual changes in assessed value due to growth. The more value that’s created the more the levy can be spread amongst and keeps the tax rate down.
Annually these impacts will continue to be monitored and adjusted to maintain a tax rate to support debt service that is efficient and necessary.
- September 10, 2020 - Public Information Meeting 1: Review Project Plan (Phase 1)
- January 25, 2021 - Committee of the Whole Meeting: Review Initial Design (Phase 2), Discuss Sustainability
- February 8, 2021 - Committee of the Whole Meeting: Continued Review of Design (Phase 2), Direction on Sustainable Elements
- February 18, 2021 - Public information Meeting 2: Review Project Design (Phase 2)
- March 8, 2021 - Village Board Meeting: Accept 50% Design Plans (Phase 2)
- May 24, 2021 - Village Board Meeting: Accept 75% Design Plans (Phase 2)
- June 28, 2021 - Village Board Meeting: Accept 95% Design Plans (Phase 2) and Authorize Project for Bidding (Phase 3)