"Where does the Village money come from and why we look for new ways to get it?"
Riverside Info » About Riverside
CBD Planning Workshop Sat 1/27
(45 posts)-
Posted Saturday Jan 27, 2007 09:19 #
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OK, I'll start. I thought the Financial presentation this morning was very clear and concise. It gave me a much better picture of how the village gets its revenue and what, in general categories, it goes for. As a primer I thought it was very good, and I look forward to learning more about the details. It occurs to me that, since a TIF is strongly backloaded as a revenue generating device, and the program for CBD development looks as though it will develop a laundry-list of things to do, I wonder if the Village has explored ways to get the money sooner rather than later - which I assume means a bond issue to be retired by TIF generated revenues. Any comments from the Village Admin on this?
Posted Saturday Jan 27, 2007 20:01 # -
Mr. Spatny,
I am not the Village Admin but I can try to answer your question. If you are referring to providing incentives for private development, remember that the Village has clearly stated they will follow a Pay as You Go approach which means that the building owners need to front the money and will only get their incentive in the future after the Village has realized the targeted increase in EAV. If on the other hand you are referring to funding the Village's targeted infratructure improvements, then I think the answer is that the Village will have to do this gradually at a pace that is supported by the collection of TIF funds. No bond offering is planned and I want to remind folks that a General Obligation backed bond backstopped by TIF funds would require referendum approval.
Posted Saturday Jan 27, 2007 20:16 # -
Corbi - are you speaking on behalf of the Village Board? I understand your view, ,but that is what it is, "your view." If, for example, the numbers were such that everyone believed that the TIF would bring in the often spoken about $20 mil, and we have seen a plan for using that for infrastructure, parking, etc., then I would like to know from the Village Admin whether it would be their policy to acquire the money up front through either a bond issue or some other mechanism. This is informational, not adversarial, so I would like to hear from them what they think the time frame for this might be, etc. I think that is all part of the process of bringing us up to speed, don't you?
Now I guess the Village income, that portion that comes in from sales tax revenue, is not broken down by geographic area, as,,for instance, from the Harlem businesses vs. the CBD. That's too bad because it would tell us what piece of the whole we are talking about improving, and what percentage of the Village budget and income it constitutes. When you take the Harlem end out, you are subtracting three gas stations and a restaurant and some other retail. So really, since the TIF is just targeted at the CBD/TIF District, we should know how much we are talking about in that area and how much remains the same, down on Harlem and elsewhere.
Maybe Kevin has these figures but I don't think I heard them.
Posted Saturday Jan 27, 2007 20:59 # -
spatny,
the village attorney has advised the board that they cannot post on an internet forum, I think.quick question on this--how can they respond to constituents' questions? can they respond thru email, face to face, letter, or only thru the public comment meeting at the 5 minutes one gets once a month during the third week of each month?
corbi328-
What do you mean by "General Obligation backed bond backstopped by TIF funds"?Is this the same as either withdrawing, or taking out a loan, from the General Fund?
miket
Posted Saturday Jan 27, 2007 23:28 # -
Another question:
How well attended was the Saturday workshop? About many attended?
I wanted to also publicly thank Ms Kemp and all who made this happen for the village's benefit.
miket
Posted Saturday Jan 27, 2007 23:32 # -
About 70-80 were at the meeting.
Here are some interesting facts reported...
1. Current sales tax revenue of $310,000 is only 2.3% of the Villages overall revenue.
2. Equalized Assesses Valuation (EAV) of the CBD has been stagnant for nearly 10 years, while EAV of our residential properties have dramatically risen (along with the real estate boom). EAV in the CBD was given at roughly $25,000...residential EAV was something like $300,000...unfortunately, the Village is limited to only a small percentage of the residential increase that they can levy (the excess has gone to District 96, Cook County, etc...)
3. Current breakdown of the CBD space includes only 33% for retail use.
So...my understanding is that:
A. Successful development of the CBD would theoretically achieve both an increase in the Sales Tax revenue and an increase in the EAV of the CBD (and subsequently and increase in commercial property taxes.)
B. A TIF would negate potential increased commercial property tax revenues for 23 years...meaning the Village would rely solely on increase sales tax (2.3% of current revenues) to achieve fiscal stability.
Here are some interesting questions my husband raised based on the financial data presented at the meeting:
1. How much revenue in increased Comercial Propery Tax would the Village realize if EAV in the CBD went up $10,000? $20,000? $30,000?
This would be part of what we give up with the TIF...right?
2. What increase in Sales Tax revenue would be required to balance the fiscal deficit? What would be a "realistic" goal in increased Retail?
3. What revenue would be anticipated as a by-product of CBD development (i.e. fees, permits, etc.)...how would this factor into increased revenues for the Village?
Posted Sunday Jan 28, 2007 07:33 # -
So, some additional food for thought:
1. All other factors aside...to even consider a TIF, you would need to see annual revenues from Sales Tax and revenues from CBD development fees, permits, etc. out pace lost revenues from unrealized Commercial Property Tax increases as discussed above.
i.e. (from above) Revenue from #2 + #3 needs to be greater than Revenue forgone from #1
2. My husband ran the following calculations (go to any Savings calculator on the web).
If the Village were to take their annual sales tax revenue ($310.000) and invest it as a capital investment for the future we get the following numbers:
A. 310K/yr for 23 yrs at 5.00% = $13,031,250.00
B. 310K/yr for 23 yrs at 7.00% = $15,637.500.00Say the Village gets CBD development to increase sales tax revenue 20%...now we get $372K a year...
A. 372K/yr for 23 yrs at 5.00% = $17,065,052.00
B. 372K/yr for 23 yrs at 7.00% = $20,478,062.00...OK, OK...those numbers are starting to look familiar...except to even consider this type of move I realize we are taking a bigger chunk out of the fiscal budget (already in seeing a growing deficit)...so we need to find a way to replace this lost revenue to capital investment to balance the fiscal budget...
...what if it came from increased revenues from CBD development without a TIF? What if increased Commercial Property Tax revenue from improved EAV of the CBD and increase revenue from fees, permits for CBD development were substantial enough to allow the village to dedicate Sales tax revenue to capital investment? Could we achieve this elusive $20M goal without TIF???
Posted Sunday Jan 28, 2007 07:52 # -
...Now, before we get too excited, another big part of the picture is about to be revealed...
Richard Wilson (Village/Metra sponsored architect who presented at the meeting) says the market research shows that Riverside is a "HOT" place to develop. Why?
A. Riverside has all the charm, history, architecture, and community value that has developers chomping at the bit to come in and make Riverside a model for preservation sensitive development so they can make their mark in history the same way Olmsted did so many years ago...
or...
B. Riverside has a need for development, contractors need to develop to make $$$...therefore Riverside = $$$ for development contractors.
If the answer is A...then I think we have nothing to fear...
...if the answer is B, then I think a big part of the debate is identified...and perhaps this needs to be the focus of our energies...i.e....
What would a community, like Riverside, need to do to attract "A." from above...perhaps this is where we need to start looking???
Posted Sunday Jan 28, 2007 08:03 # -
It seems like if the answer were "A," then we wouldn't need a TIF. We have all of these things already.
Posted Sunday Jan 28, 2007 08:24 #
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