Naperville, Lisle Township officials pitch tax savings to sell road merger
Merging the Lisle and Naperville Township road districts into one unit of government has the support of most elected officials in the two townships as it heads to voters in an April 4 referendum question.
But at least one official says he has unanswered questions and remains neutral on whether voters should approve the merger.
Supporters say the merger would continue road maintenance savings already being achieved through an intergovernmental agreement approved in August between the two road districts. They say the merger could save an estimated $800,000 to $1.4 million a year on services such as snow plowing, street sweeping and collection of brush and leaves.
"The key selling point from my perspective," Naperville Township Supervisor Rachel Ossyra said, "is the opportunity to create permanent tax savings for residents of two townships, while providing excellent services and at the same time reducing the complexity of government."
But Rick Tarulis, Lisle Township supervisor, says the savings projection is so overestimated it's "laughable." He says supportive officials are overlooking the complexities of creating a new unit of government to replace two existing units and the inequalities in tax changes that will be created.
"This is something that should get thought through more than rushed through," Tarulis said. "There could be some new savings, but there will also be some new costs."
How it affects taxes
If voters approve the merger in a binding referendum question, the Lisle/Naperville Road district would be formed during a four-year process. Highway commissioners and township supervisors would evaluate properties, equipment and reserves, sell what is determined unnecessary and organize the governance of the new district.
In the 2021 election, voters in both townships would elect a highway commissioner to oversee the broader unit, which would maintain roughly 64 centerline miles of roads -- 48 in what now is Lisle Township and 16 in Naperville Township.
Naperville Township Assessor Warren Dixon says it's inevitable in consolidation for taxes to go up for one of the consolidating units and down for the other. It's the law of averages, he says.
In this case, Naperville Township residents' taxes stand to increase because they are taxed at a lower rate for road services than Lisle Township residents -- 0.0286 for Naperville and 0.0707 for Lisle, according to the DuPage County Clerk's 2015 tax rate booklet for taxes paid in 2016. These rates mean the owner of a $300,000 house in Naperville Township pays $26.88 a year for road services, and the owner of a $300,000 house in Lisle Township pays roughly $66.45 a year.
If the merger is cleared, officials say they will work to lower the tax increase for Naperville Township residents by selling assets and drawing down reserves during the four-year transition period. Proceeds from any Naperville Township assets sold -- likely including the garage at 31W331 North Aurora Road -- would be credited back to the district's taxpayers.
Dixon and Ossyra say the idea is to create a "tax holiday," in which Naperville Township residents will not pay any property taxes to the road district for at least a couple of years during the transition. Ossyra said the district has about $3.4 million in reserves, and its property is valued at $1 million, which gives officials roughly $4 million they could return to help delay the tax increase for Naperville Township residents.
The idea is to balance the taxes Naperville Township residents would have owed over an eight-year period so the difference is as close to "net zero" as possible, Dixon said. Lisle Township Highway Commissioner Ed Young said the annual tax increase at the end of that period is estimated to be roughly $3.
Lisle Township residents, meanwhile, stand to see their taxes lowered by $24 a year from the $66.45 owed now by the owner of a $300,000 house, Dixon said. Those savings would start after the four-year transition period has concluded and the merged unit has been formed.
Not a simple task
The process of merging won't be simple, Lisle Township's Tarulis says. Officials will need to create a new mechanism to handle all of the administrative tasks each road district currently takes care of in partnership with its township, such as health insurance, payroll, banking, financial audits, retirement funds and personnel policies.
"It would be a huge amount of work," Tarulis said. "It's totally reinventing the wheel."
Supporters, however, say the work of establishing these new administrative practices should be "minimal."
Republicans and Democrats in the townships also will have to set up multitownship political organizations to choose future highway commissioner candidates.
The two townships must follow a state law that says the new road district would be governed by a four-person board consisting of the supervisor and clerk form each township. Tarulis says that could lead to deadlocked votes; Dixon says officials could work with state legislators if issues arise and they need the form of governance changed.
Before that point, Ossyra said the two townships intend to work with Norm Walzer, senior research scholar at the Northern Illinois University Center for Governmental Studies, who can consult on best practices as the entities merge.
While Tarulis said he worries these overhead items will create unanticipated costs, supporters say the merger would save money by removing duplicated work in actual road services. The merged district might not need as many street sweeping machines or snow plows, for example, if it can design more efficient routes and better logistics.
These efficiencies will help create savings estimated at $800,000 to $1.4 million a year, supporters say.
Tarulis questions those estimates because they make up such a large share of the budgets of each road district, which recently have been roughly $2.2 million a year for Lisle and between $1.8 million and $2 million for Naperville.
Young said the merged entity likely would use the Lisle Township road district's garage at 4719 Indiana Ave. and would continue services at essentially the same level for residents of both townships.
If the merger succeeds, Naperville City Council member and Lisle Township resident Kevin Coyne said it will become a model for other consolidations across the region. He said it's "preposterous" for the Naperville Township road district to exist as a distinct entity managing only 16 miles of roads and he looks forward to eliminating a unit of government through the referendum process.
Despite his concerns, Tarulis said he recognizes road district taxes likely will decrease for residents of his township.
"If Naperville Township wants to pay some of Lisle Township's taxes," Tarulis said, "who am I to object?"