Large Crowd Attends County's Truth in Taxation Hearing

By Tom Kocal, www.pacc-news.com

MT. CARROLL - It was standing room only at the Carroll County Courthouse for the annual Truth in taxation hearing, conducted before the regular meeting on Thursday, Nov. 20.

The hearing was opened by Matt Schueler, CPA with Lindgren, Callihan, Van Osdol & Co., certified public accountants for Carroll County. The proposed 20.44% overall tax increase was addressed first.

"If you look at a house that has a taxable value of $20,000 per assessed valuation, that's roughly a $26.33 increase," Schueler said.

The county proposed a levy at the maximum rate of 105% for the general fund, "which is not typically what you have done," he said. Three levies are unlimited, according to Schueler: liability insurance, IMRF, and Social Security. They are unlimited because they are based on the county's needs, on the actual expenditure required.

Rod Fritz (D-3) and chairman of the Finance Committee, asked that they address the reasons for the increase, the reason for the large attendance at the meeting. Schueler said the main reason was to cover the $450,000 shortfall in the Municipal Sales Tax Revenue, brought about by one business moving out of the county in late 2007.

"A few years ago, when we were enjoying the increase in revenues from the sales tax, we did decrease the property tax significantly," Fritz added. (They actually went down 3 years in a row). "That makes this increase seem a lot more significant when we had been decreasing the actual tax rate on the general fund levy."

John Powell of Savanna asked why they county didn't keep the tax rate as it was, and use the increased revenue for other county improvements.

Board Chairman Sharon Hook (D-2) replied, "We lowered the property tax because the sales tax kept increasing each year. Rather than take the taxpayers money, and build up a huge surplus - we already had a $2 million surplus - we lowered the tax rate. We didn't get any 'thank you's' from people then, but now that we have to raise them back to the rate we used to levy, it has caused a stir."

Hook clarified that the nearly $500,000 loss in sales tax revenue was from one business moving out of the county, and that the nearly $500,000 revenue lost was only 1% of the total sales taxes paid by this petroleum sales business, which has since moved back to the City of Savanna. Now the 1% goes to Savanna. The county will still get .25%, "so it's not a total loss," Fritz said.

Shawn Picolotti (D-1) confirmed that Palatine Oil Co., located at Lake Carroll, first moved back to Palatine.

"Savanna didn't 'steal' it away from the county. Some powers that be in Savanna actually drew them back to Carroll County, otherwise it wouldn't be here at all."

"It's a good business to have in the area," Fritz added. "And we'd like more of them to locate here."

A Lake Carroll resident, Rich Hensgen, asked what incentives are offered to help attract others.

Fritz said there is a state law that restricts a county from "stealing" a business from a municipality, whereas one municipality can lure a business from another municipality without penalty.

Bill Jahnke of Lake Carroll made the comment that the private community of Lake Carroll currently contributes in county and township taxes approximately $989,000 last year.

"This 27.4% increase will affect Lake Carroll by approximately $267,000. For us, we sometimes give, but we don't get back," Jahnke stated. "We provide our own road maintenance, our own security, a lot of things like that. I hope the board has looked thoroughly at the balance of the budget and found all the areas where they can save money, because Lake Carroll is a major contributor to the county and their overall taxation structure."

"We are aware of that, and we love Lake Carroll," added Hook. "If we get flush with sales tax revenue again in the future, we will again lower your property tax rates."

Powell is concerned that because of the city tax increases experienced the past few years due to aging infrastructure, etc., that the county increase will have a very negative affect on Savanna. "I can't believe, now that we're in this recession, that you want to raise taxes. We're heading into the heating season, too. We have people on fixed incomes, their insurance is going up. They can't handle this."

Hook knows that this is a problem not only in Savanna, but the rest of the county as well, due to its dwindling, aging population.

Cheryl Cole (D-2) reminded everyone that "a lot of the tax increases aren't from the county. School's have increased their share. Mt Carroll, for 3 years, bore the brunt of the taxes, due to consolidation. Now they're raising taxes in the other towns that were lower."

Powell voiced his concern about the land available at the Savanna Depot Park that could be generating tax revenue, but much of it is still undeveloped. "What's going on?"

"There seems to be a lot of questions about business development here in the county," Jahnke said. "And for those individuals who would like more information, I participated in some planning with the Carroll Co. Economic Development Corp. Laurie Gungel, the director, can answer any questions about development in the county better than the board. I've toured the Depot, and they're facing a very tough road for pulling in jobs."

A question was raised about any tax revenue for the county generated by the Thomson Correctional Center. Hook told the audience that none will come from the prison itself, but that increases in sales and property taxes could increase if prison guards and staff should decide to live and shop in Carroll County.

Schueler pointed out that even with the tax increase, budget expenditures for the 2009 budget are still 2.3% less than 2008. "The county board and finance committee did cut a lot of expenditures, and I do commend them for driving the cost down as much as they did."

Picolotti said, "I've always fought the tax increase. It was always proven in the end that we didn't need it. In my opinion, I'd like to see this budget approved as is, without the tax increase, and for the next year, we'll have to do some penny-pinching. Some of the things in it, we don't spend. Then at the end of the year, if we're still in dire straights, then maybe we should do something like this.

"But to tax people now, in this time and age, is not the answer. I don't think it's right. Although we've lowered our rates through the years, our taxes have not been lowered through the years. Yes, the schools do have to take some of the blame, but that is all based on assessed valuation. When the AV goes up, and the rate goes down, your taxes still aren't reduced. I don't think we need the $1.2 million cushion."

"The cushion will be needed in the spring," said Kevin Reibel (D-1). "Otherwise, we may need to make some departmental layoffs."

The Truth in taxation meeting was adjourned, and the regular board meeting was called to order.

Approval of the '09 budget

As is standard procedure, the board went through the budget, page by page, making several changes that basically did not alter the final figures. The CCEDC line item was changed from "CCEDC" to "Economic Development Funding." The $40,000 amount will not change.

"It's still a dollar-for dollar match," Fritz said.

Fritz reminded the board that of the county's three basic revenue sources, only the Property Tax revenue is "a controllable item." The other sources, Municipal Sales Taxes and Supplemental Sales Taxes, are contingent on revenue generated through sales, which can, and do, fluctuate.

The estimated ending fund balance of $1.216 million is down $30,000 from last year. But some revenue generated in FY09 won't be collected until the next FY.

"We may not have the cash to cover some of our bills," Fritz warned. "We don't want to get to the point where we have to borrow."

Ron Preston (D-2) agreed that a "cushion is nice, but we all want a cushion. Mr. Powell in Savanna wants a cushion, so do I. But we still need to tighten our belts."

Frtitz said that most of the excesses in the budget were cut out this year. He doubts that there will be any excess left in this year's budget.

Chuck Wemsrom (D-3) agrees. "I attended some of the Finance meetings, and many significant cuts have been made."

Judy Gray (D-2), said "We did not underestimate our revenues as we did in the past."

Gerald Bork (D-2) wondered if the 1/4% revenue expected from Palatine Oil relocating to Savannna was included. Fritz said that based on last year, and with the major decrease in the price of gasoline, "which is a good thing," the county should not expect to receive more than $250,000.

Salary increases

Janitor's proposed salary increase of 4% was discussed. Some suggested a reduction of 1%. A motion was made and seconded to drop the salary increase for all non-union employees from 4% to 3%. It would cut the budget by only about $3,000.

Wemstrom said it was a fair budget as is, and was unfair to reduce peoples' wages, and that they would be penalizing 10 people out of 60 employees.

After a roll call vote, the motion failed 8-7.

The new county administrator's salary increase was questioned. Kurt Dreger (D-1) argued that Michael Doty's performance should be evaluated before getting an increase from $65,000 to $69,600, and made a motion to that effect. Doty started in August. Preston and Dreger cited his contract, and hoped that an evaluation should take place "at least once annually" before such a substantial increase.

Wemstrom said that during the interviews with Doty, we agreed that we would come in "low" considering his experience, evaluate him within 3-4 months,and give him an increase. "I think most of us are pleased with his performance."

Cole questioned the increase, too, based on the fact that Doty does not live in Carroll County. He bought his home in Boone County only 2 years ago, and with the current state of the real estate situation, would take a substantial loss on his property if he sold it now.

Roll call vote was again an 8 yes-7 no result, so the motion was approved to keep Doty's salary at his current $65,000.

The $40,000 line item for the Carroll County Economic Development Funding was changed to $20,000 up-front to the CCEDC, and $20,000 matching. The motion by Joyce Schubert (D-3) was approved unanimously.

The Sheriff's budget ($49,000) for the purchase of 2 new vehicles was cut to $29,000 for the purchase of an SUV.

Motion to approve the 2009 Budget with changes was made by Fritz, and passed unanimously. A roll call vote to approve the levy as presented in the draft budget resulted in a 10 yes - 5 no vote. The levy passed.

Other Board action

- Approved a resolution to designate the county treasurer as the chairperson for the Carroll County Deferred Compensation committee;

- Approved the renewal of the county health insurance policy, Blue Cross/Blue Shield, with a 6.5% premium increase;

- Transferred $75,000 from the county highway fund to the bridge aid fund;

- Approved a zoning variance for a shed to be constructed at 5598 Riverview Rd. in Thomson;

- A resolution appropriating county engineers salary from the county motor fuel tax fund for FY09 was approved;

- Appointed Scott Sullivan to serve on the Tri-County Board, replacing Ken Smith, who resigned. Kenneth Moll was also appointed to continue on the Zoning Board of Appeals;

- Raffle license for Rock Island Technical Society was approved.

- Set the time and date for the Reapportionment meeting as Dec. 2, 9:30 a.m., to swear-in newly elected officials, elect new board chairman, and appoint committees.

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