Geneva schools may dip into savings to pay debt, but taxes will still go up
Geneva schools might take $3.9 million or so out of savings next year and use it to pay some of the $325 million it owes on new schools, renovations and technological upgrades.
Donna Oberg, assistant superintendent for business services, recommended doing so, as the board considered how much money to collect from property taxpayers in spring 2012. And even with that, she expects the school tax on a $288,000 house to go up $279, or to about $5,400, assuming the homeowner takes no exemptions.
The board agreed to ask for $61.5 million for its education, operations/maintenance, transportation, working cash and retirement funds. It also expects that the Kane County clerk will calculate and extend a levy of $16.29 million for debt payments. The debt-service portion is not limited by the property tax cap. An abatement is the only control the board has over it.
The board voted only on the tax levy Monday; the levy has to be filed with the county clerk by Dec. 27. The board has until March 1 to decide whether to do the proposed abatement. Judging by favorable comments from at least four trustees, it would seem such a plan will pass.
Trustee Mark Grosso was the only “no” vote, and Trustee Bill Wilson was absent.
“I guess the problem I have is this is about the fourth year of this recession, and our taxpayers aren’t getting any relief. I was hoping we could have some short-term relief for a year or two” with no increase and using some of the reserves to pay debt, he said. “And I know that doesn’t capture your new construction.”
Furthermore, he said, “we still need to reduce our operating expense.” He believes the board has made only a few “minor reductions” in the two years he has served. “We haven’t really dug in.”
By state law, the district is entitled to collect up to 1.5 percent more than taxes extended in 2011, plus taxes on new property. The value of that new property, however, has not been determined by Kane County. To make sure it gets everything it can in taxes on that new property now and in years to come, the district asks for more than it expects to receive. It is a common practice.
Oberg suggested the district take the $3.9 million out of the education fund reserves, leaving about $15 million in it to cover two months’ worth of payroll and other operating expenses. That would leave the district with a 30 percent cash reserve overall, which helps to maintain a good bond rating, she said. That rating is important, Trustee Kelly Nowak said, as the district seeks to refinance some of that debt to lower interest rates.
Bob McQuillan, co-founder of the Geneva Tax FACTS watchdog group, chastised the board after the vote. He supported Grosso’s idea. “You could have done that, and then within a few years go to referendum and recapture that new construction that you lost. The negative here is that the community would have had to agree to a tax-rate increase,” he said.
But McQuillan also criticized residents. He had tried to rally people to attend Monday’s meeting, sending out emails to Tax FACTS subscribers discussing the district’s debt and the property taxes and posting comments online on news stories. About a half-dozen people showed up.
“The voters bear the rest (of the blame) for voting to increase the debt (in several referendums) or not voting at all. On average, about 10 percent of the registered voters put us behind the 8-ball,” he said.
The district owes about $162 million in principal. Debt levies are expected to climb from $14.6 million now to $25 million by 2020. Under the current amortization schedules, the district will be making payments until 2027.
McQuillan suggested the board come up with three “solutions” for debt repayment, conduct community forums about them and then conduct and electronic vote on its website.
After the meeting, he said he took the low attendance as a sign people either don’t care or don’t think their opinion matters.