Improved funding of the Lake in the Hills police pension fund is allowing village trustees to go another year without raising property taxes on current property owners following a decision by the Village Board Tuesday night.
Lake in the Hills will now be going on its 12th consecutive year without raising property taxes to pay rising pension obligations. According to village documents, property owners will not see an increase in taxes on their existing home value next year, but the village will increase the property tax levy by taxing new construction, which includes improvements like an addition on a home or a new subdivision.
The overall property tax levy will increase by 0.6%, or $33,163, next year, Village Finance Director Pete Stefan said.
The last time Lake in the Hills increased the property tax levy on existing property was in 2009 when there was a 4% increase, according to village documents.
The village’s ability to continue meeting their pension obligations with existing funds is making it possible for them to forego property tax increases, village staff said. The village’s investments in the pension fund have improved and the recommended contribution from the village to the fund has decreased by 12%.
“Hopefully, this trend will continue,” Stefan said.
Some other McHenry County communities have not been as fortunate. The Cary Village Board is considering an increase to its property tax levy, in part due to police pension costs, and so is the Marengo City Council.
Lake in the Hills decreased the unfunded liability of its pension fund by 30% over the last year, according to an independent review of the village’s police pension fund by accounting firm Lauterbach & Amen. In the same time period, the firm reported that the village increased the funding ratio of the pension fund by about 7% in the last year to nearly 84% funded.
“You’re up to 84% on an actuarial basis. On a market value basis, you’re actually over 90%, which is unheard of in the state of Illinois,” Stefan said.
Both the firm and the state estimated the unfunded amount in the police pension fund is between $8 and $9 million, according to village documents.
Overall, 28% of the village’s general fund revenue is made up of property tax revenue, according to Stefan. The village pays into the police pension fund from the general revenue fund, Stefan said.
Village Board President Ray Bogdanowski said he thinks the village is saving money over time by continuing to meet their pension obligations without property tax increases.
The Village Board will vote on the village’s final property tax levy on Dec. 9.
Source: The Daily Chronicle