St. Charles set to keep tax levy flat for 9th straight year

Not content with just having a frozen property tax levy for the last eight years, St. Charles officials gave preliminary approval to a plan that would see the city's tax rate drop Monday night.

The 2017 levy, which is collected in 2018, calls for $12.06 million in property taxes for the operating fund. That's the account that funds the day-to-day work of the city. Many municipalities raise the levy each year to at least account for inflation. St. Charles officials have chosen not to do so. In fact, aldermen will not have touched that $12.06 million amount in nearly a decade if they lock in the levy following a public hearing in December.

Adding to that good news for taxpayers are projections showing a 3.23 percent increase in the taxable value of property within the city limits. Because local property values will rise, and the amount the city will levy will remain stagnant, the impact would be roughly a 3 percent decline in the city's property tax rate. That rate stands at about 88 cents per $100 of equalized assessed value.

Aldermen unanimously accepted the levy plan Monday night. But there is at least one financial threat looming that could thaw the long freeze of the tax levy.

Outside auditors presented a report Monday that praised the city's overall financial health and planning. In the short term, all the numbers look good. Even the city's IMRF pension plan is more than 85 percent funded. The numbers didn't look as rosy for the police and firefighter pension plans.

Despite a good year of investment returns, the police pension fund still carries a $32 million net pension liability. That liability is only about 49 percent funded.

The firefighter pension fund is a little better off. Auditors said that liability is about 68 percent funded.

The funding levels for both the police and firefighter pension funds are similar to what the outside auditors said they see at many other municipalities in Illinois. That said, it's a long-term funding problem that could come back to bite the city with a lower bond rating if a plan isn't developed to address the shortage.

Chris Minick, the city's chief financial officer, said the city has made every required contribution to the pension plans so far. However, with the funding levels where they are, the time is coming to discuss changes to the actuarial assumptions involved with those contributions. People are clearly living longer than they used to, Minick said, and it's likely he will suggest aldermen make changes to the 2018 levy a year from now to increase the city's pension funding levels.