1. CREATIVE FINANCING REAL ESTATE TRANSFER TAX BEST PRACTICES FORUM REAL ESTATE MANAGEMENT COMMITTEE FACILITY MANAGEMENT COMMITTEE PROFESSIONAL DEVELOPMENT COMMITTEES ILLINOIS ASSOCIATION OF SCHOOL BUSINESS OFFICIALS Presented to Annual Educational Conference, May 16, 2012

2. Paul K. ‘Pookie’ Halverson Emeritus 2thegoodlife@comcast.net John R. McNutt President, Shales McNutt Construction Elgin, Il johnmcnutt@shalesmcnutt.com 847.622.1214 Stephen Nelson Vice President, School District 427, Sycamore Principal\Education Planner\AIA, LEED Studio-GC Architecture+BIM Rolling Meadows, IL s.nelson@studiogc.com 847.952.0545 johnmcnutt@shalesmcnutt.com s.nelson@studiogc.com

3. CREATIVE FINANCING REAL ESTATE TRANSFER TAX What we will cover School District situation Need for revenue (unrestricted) Intergovernmental relations/cooperation Referendum Board of Education Policies Current Status Panelcase studies question and answer

4. School District Situation Independent fiscal analysis operating revenues face a shortfall of $850,000 annually 2005-2015 (NIU Center for Governmental Studies, March 2005) Board of Education policy for balanced budgets Board of Education policy for student housing adequacy, planning

5. School District Situation Continuing moderate growth State funds – Not timely – Unreliable for planning (construction) – Unfunded mandates – Not consistent with local planning efforts

6. Targeted Solution Real Estate Transfer Tax Sycamore is home rule municipality Creates new (unrestricted) source of funds intended to supplement School District operating revenues Applies to move-ins from another location for impact of growth to pay for increase of spending need Does not impact property tax rate

7. Targeted Solution Real Estate Transfer Tax Based on 2004 real estate transactions, approximately $850,000 would be paid and available to the School District – Range of permits 1997 (88) 2005 (712) – estimate thru 2014 (approx. 250) Unrestricted funds for School District planning Board of Education determines appropriate need (continues intergovernmental cooperation with school purpose being public)

8. InterGovernmental Cooperation Continued relationship after AdHoc action and Sycamore City Council action All stakeholders accepted School District role in community (property tax, value of education, relation to work force, relation to property values)

9. InterGovernmental Cooperation Process AdHoc Committee Sycamore City Council Sycamore City attorney review Sycamore adopted ordinance – Included discussions on impact fees, transition fees, annexations Citizens Committee (broad based)

10. Referendum question Shall the City of Sycamore, pursuant to its home rule powers, impose a real estate transfer transfer tax at a rate of one-half of one percent (.005), to be paid by the buyer of the real estate transferred, subject to an exemption for Sycamore homeowners purchasing homestead real estate within the city and other exemptions as defined in the governing ordinance, with the revenue of the proposed transfer tax to be used for support of the Sycamore School District?

11. Real Estate Transfer Tax Paid by buyer at time of closing To the Sycamore City Treasurer Funds maintained with separate account – Specific accounting and report Paid to School District School District budget process – Specific accounting and report

12. Board of Education Policies Fund Balance – minimum targets Balanced Budgets – adopted Abatement Moody’s rating ASBO International – Comprehensive Annual Financial Reporting excellence in reporting (CAFR)

13. Current Status Court lawsuit in process Constitutionality? Federal and State Home rule School funding

14. BEST PRACTICES FORUM CREATIVE FINANCING CHALLENGE Discuss issues Network with other ASBO members Think outside the box, think with a new box Pressure on School Business Officials to be creative for solutions to your situation

15. Creative Financing School District Challenge Contact for follow-up questions Steve Nelson – Emails.nelson@studiogc.com John McNutt – Email johnmcnutt@shalesmcnutt.com Paul Halverson – Email2thegoodlife@comcast.net

16. LEGAL AND PRACTICIAL STEPS FOR SCHOOL PROPERTY MANAGEMENT ASBO Committees www.iasbo.org Association of School Business Officials State and International Professional Development 24 Committees Legislative Resource

17. LEGAL AND PRACTICIAL STEPS FOR SCHOOL PROPERTY MANAGEMENT Question and Answer

18. LEGAL AND PRACTICIAL STEPS FOR SCHOOL PROPERTY MANAGEMENT Biography/Vitae