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WHITING COMMUNITY FORUM

WHITING COMMUNITY FORUM. April 2, 2008. AGENDA. Property Tax Legislation – HB1001 Drinking Water Decision Questions & Answers. PROPERTY TAX LEGISLATION HB1001. BACKGROUND. Property tax relief is and has been our top priority Actions taken to date Reduced expenses

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WHITING COMMUNITY FORUM

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  1. WHITINGCOMMUNITY FORUM April 2, 2008

  2. AGENDA • Property Tax Legislation – HB1001 • Drinking Water Decision • Questions & Answers

  3. PROPERTY TAXLEGISLATIONHB1001

  4. BACKGROUND • Property tax relief is and has been our top priority • Actions taken to date • Reduced expenses • Maximus Good Government Study • Improved efficiency – not done • Reduced staff by 20% since 2003 • Provided local relief

  5. BACKGROUND • 2007 sequence of events • Marion County tax bills increased • In most cases, less than Lake County’s did in 2004 • Governor reacted with a plan that appeased the voters

  6. GOVERNOR’S PLAN • Caps – 1% - 2% - 3% • State takeover of levies • Funded by 1% sales tax • Elimination of tax credits • $750 million short to fully fund Plan • No initial financial analysis done

  7. GOVERNOR’S PLAN • Governor’s answer was to simply reduce the existing revenue for local government – Counties, Townships, Cities, Towns, Schools and Libraries to fund the $750 million shortfall • “Learn to live with less”, he said

  8. HB1001 • Governor’s Plan was presented to the Legislature via HB1001 • 900+ pages long • Very complicated • 100’s of changes to tax law and related laws

  9. HB1001 IMPACT TO WHITING • Current Civil City & Sanitary Dist. combined property tax levies of $9.6 million of which 40% is Public Safety • Initial analysis of HB1001 showed a reduction in Whiting’s total property tax revenue of $3.8 million or 40%

  10. HB1001 IMPACT TO WHITING • Several studies done, all indicating severe losses for Whiting • A privately funded analysis in January indicated that Whiting’s losses would be $5.7 million or 60%

  11. HB1001 IMPACT TO WHITING • Current total levy - $9.6 million • Worst case losses - $5.7 million • Police & Fire Pension - $500,000 • Insurance obligations - $1.5 million • Debt service - $1.2 million • Balance - $700,000

  12. HB1001 SHORTCOMINGS • Not properly funded • No time for local government to make adjustments • Granted additional large industrial tax breaks

  13. SAVE WHITING CAMPAIGN • Intention was to draw attention to our unique situation • Timing was intended to reach GA the week of conference committees • Wildly successful • Every legislator knew our situation

  14. AMENDED HB1001 • Police & Fire pensions to state • Additional County levies to state • Debt service outside of the caps for Lake & St. Joe Counties • “Distressed Unit” appeal • New projected losses of $1.6 M

  15. DEBT SERVICE • Existing Civil City debt • <$100,000 annually until 2012 • Existing Sanitary District debt • $1.1M annually until 2015 • Existing School debt • Paid off this year

  16. DEBT SERVICE • County debt – no details • Most Lake County property tax payers will not receive the full benefit of caps until debt is paid • Est. adjusted Whiting caps will be • 1.3% - 2.9% - 3.9% in 2010

  17. DEBT SERVICE • City will attempt to pay off debt earlier than scheduled to maximize relief to property owners • BP project will expedite process and continue to drive the caps closer to 1% each year • By 2012 we should be close to 1%

  18. IMPACT TO TAXPAYERS

  19. TOTAL IMPACT • Still need to reduce $1.6 million or nearly 17% • Property owners still get significant property tax relief • City services will continue • Amended bill is much better legislation than the Governor’s Plan

  20. MISCELLANEOUS • 2008 Tax Bills???? • 2% cap in place • No 20% local Homestead Credit • $620M in additional State Homestead Credits • Increased BP AV • Should be similar to 2007

  21. MISCELLANEOUS • RDA grant cannot be used for tax relief – received many calls • TIF changes • TIF revenue – WCE • Very limited use of funds • Law changes July 1 – more restrictive • Will be using fund in prep for 2009-10

  22. ANNOUNCEMENT • Property Tax Workshop • This Saturday, April 5 at 10:00 am • Property Tax problems • Billing errors • Assessment issues • Exemption issues

  23. DRINKING WATERDECISION

  24. BACKGROUND • 2004 Options • Build a new plant - $3.5M • Buy from Hammond - $2.5M • Required us to build storage tanks and a pumping station • Let Indiana-American Water provide our water – no capital cost

  25. BACKGROUND • 2004 rate increase needed • Build a new plant – 15% • Buy from Hammond – 15% • Let Indiana-American Water provide our water – 225% • Average water (sewer fees not included) bill from $9.76 to $32.00

  26. BACKGROUND • 2005 - after significant research and discussion, announced our intentions to build new plant • 2005-2007 could not acquire property needed to build • Needed land to build storage tanks • Pumping station

  27. ENVIRONMENT CHANGE • Hammond – Whiting working together on several projects • Discussions on water options reopened • Identified project to save $9M capital costs between both cities

  28. ENVIRONMENT CHANGE • Hammond terms modified • Lower rate • Split capital costs • Storage and pumping station no longer needed • Total investment – less than $500,000

  29. BOTTOM-LINE • Stable rates for many years out • No debt needed to fund project • Significant operational cost savings - up to $250,000 annually

  30. QUESTIONS & ANSWERS

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