Logan County approves delaying first installment of property taxes; continues course for courthouse repair

 

[April 30, 2020] 

At the Regular Logan County Board meeting on Tuesday, April 21, the board voted on several items from the Finance Committee.

All 12 board members were present either in person or remotely. They were Dave Blankenship, Emily Davenport, Janet Estill, Bob Farmer, Cameron Halpin, David Hepler, Steve Jenness, Chuck Ruben, Bob Sanders, Scott Schaffenacker, Annette Welch and Jim Wessbecher.

Property owners have to September 1st to pay taxes

Due to Covid-19 creating financial hardship for many residents, property taxes may be made in full at the later payment option with no interest penalty in 2020.

Ruben said many other counties are delaying interest penalties.

This relieves property owners pay to both installments on Sept 1, 2020 with no penalty.

However, Treasurer Penny Thomas cautioned that if the property taxes are not paid by September 1, then all penalties will accrue including those from July.

Logan County Courthouse Repair

Finance Committee Chairman Chuck Ruben made a motion to approve an ordinance imposing a Special County Retailers Occupation Tax.

The state of Illinois needs a copy of the ordinance establishing the tax before May 1st for the tax to begin being collected on July 1st, 2020

At Thursday’s Board Workshop, Blankenship had questions about this ordinance because he said it does not specify the courthouse address. He does not want the money spent for anything other than courthouse repairs.

For transparency, Blankenship wanted a simple statement that all the new public facilities sales tax revenue passed by voter referendum and any interest earned should go to [the courthouse address] at 601 Broadway St. He does not want the funds to go to satellite buildings.

The purpose of this ordinance is not to that say where the money would be spent, but to go to the state for the state to tell retailers to begin imposing the tax on July 1.
 

Logan County Treasurer Penny Thomas said the IRS website has a standard letter for the public facilities tax and the county used the exact wording for the referendum.

However, the board agreed to add wording to the communication to the state that the sales tax would be directed only for Logan County Courthouse restoration, repairs and maintenance.

The board passed another directly related ordinance authorizing the issuance of County General Obligation Bonds. These bonds would be in the form of Alternate Revenue Source to be paid by the newly approved sales tax.

The primary source of revenue pledged towards the principal and interest of the bond would come from the public facilities tax revenue.

The county has had a 50-cent per $100 Public Safety Tax that in place for years. That sales tax has averaged over $900,000 a year.

By statute the county cannot commit 100 percent of the new sales tax revenue. Blankenship’s understanding is that the county can only commit 80 percent of the total facilities tax revenue toward bond (debt service) principal and interest. That would be approximately $750,000.

This cushion means, if the facilities tax does not bring in amount due for the body, the county may still remain in good shape. The county has a 20 percent fluctuation for the tax before they must turn to what has been pledged to back up the bond.

If the revenue drops below the required debt service (principal and interest) payment, the county would have to revert to other sources of revenue to make up the difference.

What Blankenship wants is to take a percentage of the Personal Property Replacement Tax (PPRT) used for budgeted expenditures and put it in a separate holding/escrow account every year. That funding would make up the insufficiency in funding should the facility tax revenue drop below the bond debt service amount.

This separate holding account dedicated solely to meeting the bond debt service would reduce the risk of having to turn to less palatable measures to pay the debt service. Blankenship said he has gotten questions from people concerned about that possibility. Several constituents who approached Blankenship requested that an equitable amount of PPRT be placed in escrow every year.

Ruben said he was not sure escrow would be allowed.

As discussed at the special meeting on March 25, the notice of intent to issue bonds would be limited to $750,000 debt service for potentially $11 M in bonds.

Ruben said the tax money would pay off the bond and then go into a fund balance with the money used for courthouse maintenance.

If sufficient money does not come in to pay off the bond, Ruben said they may have to use other funds.

The experts are helping the board know how to proceed with the bond down the road. Blankenship said he was told to reach out to the bond company for clarification. He said an upcoming feasibility study will give more financial insight to the board.

At the special meeting, board members agreed that choosing a higher bond amount now for the intent to issue bonds notice allowed opportunity to lower that figure when it is time to pass the final ordinance to issue bonds when interest rates and construction costs are better known.

Logan County State’s Attorney Brad Hauge has said he would like to start the feasibility study as soon as possible. That should provide more understanding of where the county stands.

Coroner and circuit clerk salaries

The board also approved salaries for the coroner and circuit clerk.

Ruben motioned to set the coroner’s salary at $33,300 for the next four years. This amount is the same as what is in the current budget and was set back in 2018.

Hepler said he is concerned the people in these offices will not have any salary increases for six years even for cost of living.

Ruben said the circuit clerk’s salary is set for one year and can be changed midstream.

Hepler motioned to table the votes until May to give the new office holders a chance to be heard, but it failed.

The coroner’s salary was approved with Hepler being the only ‘no’ vote.

The board then unanimously approved setting the circuit clerk’s salary at $65,000 for the four-year term.

Other Finance Committee motions included:

• Naming Logan County as the lead agency for Downstate Small Business Stabilization. This program will make funds available through grants up to $25,000 for businesses that have less than 50 employees.

Chairman Davenport said 12-15 businesses in the county have applied and the county would be the grantee.
The board will have a public hearing at 5:15 p.m. on Thursday, April 30 to approve the Downstate Small Business Stabilization application funded by Community Development Block Grant funds.

• Postponement of Real Estate Tax delinquency interest date for the first installment. Ruben said many other counties are delaying interest penalties.

This relieves property owners pay to both installments on Sept 1, 2020 with no penalty.

Thomas said if the property taxes are not paid by September 1, all penalties will accrue then including those from July.
• Renewal of the Health Department’s $350,000 line of credit that expires in September. Of the $350,000 line of credit the board approved a couple years ago, Ruben said the Health Department has just used $100,000. After the pandemic, Ruben said they are likely to use more of it, so this renewal gives them more time to pay back the line of credit.

• A Fair Housing Act Resolution.

• An Assessor Tax Appeal at a cost not to exceed $1,000 out of the Professional Fees line item.

• The Abstract of Votes of the March 17, 2020, Primary Election.

The next Regular Board meeting will be held on Tuesday, May 19, in the Logan County Courthouse. If the shelter in place order is still going on, members of the public should be able to join the meeting remotely through Google Meet.

[Angela Reiners]