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Crystal Lake will consider boosting tax levy

CRYSTAL LAKE – The Crystal Lake City Council will consider an 8.3 percent tax levy increase at Tuesday’s meeting.

The roughly $1.2 million increase in proposed tax revenue would go to cover pensions, firefighter salaries and benefits, library services and crossing guard services. Unlike in many municipalities, no property tax revenue goes toward the general fund.

The increase – projected to boost property tax revenue from $14.7 million to about $16 million – is a change of pace for a City Council that has approved annual increases between $300,00 and $400,000 most years and even a roughly $300,000 decrease between 2009 and 2010.

The largest bump comes in the fire rescue fund. The proposal calls for a $494,222 increase to move the fund’s budget from $5.6 million to $6.1 million. The increase is needed to offset costs related to the newest collective bargaining agreement, which awarded a 6 percent increase in wages over the life of the contract from 2011 through January 2014.

The second biggest increase is seen in the Illinois Municipal Retirement Fund, which is projected to grow from $1.4 million to $1.7 million. The additional dollars are needed to stop the practice of using reserves to fully fund the pensions. Since May 2011, roughly $760,000 in reserves has gone to the pension fund.

But both of those increases do not add up for councilman Jeff Thorsen. He said the 8.6 percent increase in the fire rescue fund seemed more than needed to cover the conditions of the collective bargaining agreement and suggested either money management or actuarial projections were wrong in the pension fund.

Thorsen pointed to an actuary estimate that showed one year in a five-year projection would yield a negative 0.41 percent return on investment in the pension fund.

“[Return on investments] are bad but they’re not negative,” Thorsen said. “We either have a big problem with how we manage that money or with our assumptions.”

While Thorsen plans to vote against the proposal, some council members have not decided.

Councilman Ralph Dawson said he is still digesting the information, but is inclined to be skeptical of large levy raises.

“I have to sort of look at it in my own mind and justify it with today’s economy because everyone is asking for something,” he said. “I know we have obligations, but it does concern me.”

Proponents of the levy increase, such as Mayor Aaron Shepley, have some numbers to support their position.

If Crystal Lake would have implemented annual 3 percent raises to the levy, tax collections would have been larger each year, including the coming fiscal year, as it would have totaled $16.2 million instead of the projected $16 million. The tax rate – excluding libraries – is also less than that of 10 surrounding communities including Algonquin, Lakewood and Woodstock.

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