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TO: Mayor Robert J. O’Connor
FROM: Brian W. Caputo, Chief Financial Officer/City Treasurer
DATE: November 29, 2016
SUBJECT:
An Ordinance Authorizing and Providing for the Abatement of Special Service Area Tax Levies, 2016 Tax Levy Extension.
PURPOSE:
To obtain the City Council’s approval of a proposed ordinance that would serve to partially abate the 2016 SSA property tax levy for 34-series SSAs.
BACKGROUND:
From 1996 through 2000, the City of Aurora established seven SSAs in Kendall and Will Counties, SSAs 34A through 34G. (SSA 34C2 was added in 2001.) Initially, the SSA property taxes generated from these “34-series SSAs” served to provide resources to operate Fire Station #12 until the money generated from the corporate levy was sufficient to cover the station’s operating costs. Since 2000 (with the 1999 tax levy), the revenues received from the corporate levy have been sufficient to cover those costs.
Under the enabling SSA ordinances, SSA property taxes from 34-series SSAs are to be used to provide for the construction of elementary schools to serve the children living in those SSAs once the corporate levy upon the SSAs has provided enough revenues to support the operation of Fire Station #12. In 2000, the city issued a series of installment contract certificates (ICCs) to finance the construction of one elementary school for the SSAs. A series of debt certificates was issued in 2002 to assist in financing the construction of a second elementary school. The schools are located in Oswego School District 308 and that school district built the school buildings as the city’s agent.
On December 19, 2006, the city issued its Series 2006 Refunding Debt Certificates. These certificates refinanced the Series 2000 ICCs and resulted in a $344,489.77 net present value savings for the property owners in 34-series SSAs.
On September 11, 2012, the city issued its Series 2012D Refunding Debt Certificates. These certificates refinanced the Series 2002 Debt Certificates and resulted in a $389,470.73 net present value savings.
DISCUSSION:
On December 14, 1999, through the City Council’s passage of Resolution No. R99-515, the city entered into an intergovernmental agreement with Oswego School District 308. That agreement provides for the city to apply the elementary school portion of land-cash fees received from the sale of 34-series SSA properties to the principal and interest payments on debt issued to construct the elementary schools.
With the sale of homes in the 34-series SSAs, the city has collected sufficient land-cash fees to permit the application of $25,000.00 to debt service on the Series 2012D Debt Certificates in 2016. Therefore, the proposed ordinance would abate the original 2016 debt service levy for the Series 2012D Debt Certificates ($271,300.00) by $25,000. The result would be a net 2016 levy of $246,300 for the 2012D issue. The total 2016 debt service levy for 34-series SSAs (i.e., for all outstanding SSA debt) will be reduced from $596,900 to $571,900 because of the abatement.
With the abatement, the 2016 SSA property tax rate for the 34-series SSAs is expected to be less than $0.50 per $100.00 of equalized assessed value. For 2015 (taxes paid in 2016), the rate was about $0.44.
IMPACT STATEMENT:
Not applicable.
RECOMMENDATIONS:
That the City Council approve the attached, proposed ordinance that would serve to partially abate the 2016 SSA property tax levy for 34-series SSAs.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
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An Ordinance Authorizing And Providing For The Abatement Of Special Service Area Tax Levies. 2016 Tax Levy Extension.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City of Aurora, Illinois has adopted Ordinance No. O02-15 (the “SSA 34 Tax Levy Ordinance”), which provided for the annual levy of taxes commencing with the 2002 levy year, in certain special service areas (SSAs), specifically SSA 34A through SSA 34G (including SSA 34C2), in order to meet the debt service requirements of the City’s Debt Certificates, Series 2002 (Special Service Area Number 34 Project), issued pursuant to City Ordinance No. O02-14; and
WHEREAS, the SSA 34 Tax Levy Ordinance has been filed with the offices of the Will and Kendall County Clerks; and
WHEREAS, the Mayor, City Clerk, and Chief Financial Officer/City Treasurer of the City of Aurora executed a Certificate of Abatement (the “Certificate”) on October 1, 2012 to partially abate the 2012 levy provided for in the SSA 34 Tax Levy Ordinance due to the issuance of the Series 2012D Refunding Debt Certificates; and
WHEREAS, the Certificate has been filed with the offices of the Will and Kendall County Clerks; and
WHEREAS, it is the intent of the City of Aurora to further abate certain amounts of the 2016 tax levy created by the SSA 34 Tax Levy Ordinance; and
WHEREAS, the City of Aurora does hereby declare that sufficient funds have been designated as available to provide for the abatement of a portion of said special service area debt service tax levy.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows: that the City of Aurora does hereby authorize and approve the abatement of the special service area debt service tax levy set forth as follows for 2016:
SPECIAL SERVICE AREA 34 PROJECT, SERIES 2002
Tax Levy Ordinance No. O02-15 (February 12, 2002)
Tax Levy Required (year 2016): $315,000.00
CERTIFICATE OF ABATEMENT, OCTOBER 1, 2012
Amount Previously Abated: $43,700.00
Amount of Additional Abatement Hereby Authorized: $25,000.00
Balance to be levied: $246,300.00; and
BE IT FURTHER ORDAINED THAT: The Mayor and City Council of the City of Aurora, Illinois, authorize and direct the City Treasurer and City Clerk of the City of Aurora, Illinois, to file a certified copy of this Ordinance with the office of the Will and Kendall County Clerks, thereby authorizing the County Clerks to abate the special service area debt service tax levies in the amount set forth above; and
PASSED by the City Council of the City of Aurora, Illinois, on the 20th day of December, 2016.
AYES ____ NAYS ____ ABSENT ____
APPROVED AND SIGNED by the Mayor of the City of Aurora, Illinois, on the 20th day of December, 2016.
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Mayor
ATTEST:
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City Clerk