1. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy Presented to Finance Advisory Committee October 27, 2015

2. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy Timeline October 27, 2015Initial discussion of the levy with the Finance Advisory Committee November 9, 2015Estimated levy presented at the City Council meeting November 23, 2015Truth in Taxation notice published and Public Hearing. First reading of the Levy. December 14, 2015Second reading of the 2015 Tax Levy. December 29, 2015Levy Filed with the County

3. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy

6. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy EAV x Rate = Dollars

7. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy

8. The Executive Partners Inc. (EPI) Strategic Planning Review from June of 2013 recommends not making debt payments from the General Fund.

9. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy Making debt payments from the General Fund is not a sustainable practice, particularly in light of escalating employee and material costs. Specifically, the use of property taxes over the life of capital items is instead recommended.

10. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy This EPI report goes on to further indicate that some increase in property tax may be necessary.

11. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy The City’s current financial policies also states “Levy for Police, Fire and IMRF per actuary calculations. If the actuarial reports indicate a higher employer contribution is needed, said increase will need to be added to the City’s overall previous year levy request to avoid underfunding problems.”

12. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy Currently the Police Pension Fund is funded at 55.90% while the Fire Pension Fund is funded at 42.60%. By using this lower level of funding method the unfunded obligation to the pension funds will continue to increase. Funding at a higher method or putting in additional dollars to these funds may be necessary in the future to ensure the funds are at the 90% funding level by 2040.

13. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy Also, in light of the recent Moody’s report applying a negative outlook on to the City’s Bond rating, staff is recommending changing the funding method for the 2015 levy back to Entry Age Normal, which is the higher level method. The City had used the Entry Age Normal method until 2011 tax year.

14. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy The City has only used the PUC method for the last four years (2011-2014). The City has some time to turn this negative outlook around and get it dropped off the City’s rating of Aa2. Funding the pension funds at a higher level can be one step in assisting with this process.

15. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy FICA Comparison 2014 Levy Request = $204,818 FY16 Budget Dollars General Fund = $578,303 IMRF Comparison 2014 Levy Request = $251,035 FY16 Budget Dollars General Fund = $739,386

16. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy

17. As shown from the history, the City’s past practice was not to levy dollars for debt payments (with the exception of the Library issuance in 2013), General Corporate, Police Protection, Fire Protection or full funding IMRF and Social Security Employer mandated pension obligations. Currently a resident of DeKalb with a home value of $150,000 receives Police and Fire protection as well as Street maintenance for snow removal for about $512/year.

18. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy As noted in the Moody’s report, “while the city has maintained steady revenues from its property tax base despite declines in valuation, it makes up a relatively small overall share of the operating fund revenues at 12.6% in fiscal 2014.”

19. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy From this comment it is clear to see the City levies for dollars as a home rule community and has kept them fairly constant, however the percentage of this revenue stream in comparison to the overall General Fund revenues is a small percentage.

20. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy The EPI report also states “Over time, become less reliant on sales tax revenue while making property tax revenue a larger part of the general fund revenue”.

21. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy

27. CITY OF DEKALB CITY OF DEKALB 2014 Property Tax Levy Staff is recommending to fully levy for the Police and Fire Pension obligations at the higher State recommended funding level and only abate a portion of its debt obligations as shown in option #1. This option is something recommended by the EPI study, the City’s Financial Policies, GASB (Government Accounting Standard Board), and could assist in having the negative outlook dropped from the Moody’s rating currently assigned.

28. CITY OF DEKALB CITY OF DEKALB 2015 Property Tax Levy Timeline October 27, 2015Initial discussion of the levy with the Finance Advisory Committee November 9, 2015Estimated levy presented at the City Council meeting November 23, 2015Truth in Taxation notice published and Public Hearing. First reading of the Levy. December 14, 2015Second reading of the 2015 Tax Levy. December 29, 2015Levy Filed with the County