After the break, some other ideas that might help the village budget: 

Pay for the Ogden TIF preamble agreement with District 58 using Ogden TIF funds and report them in the annual TIF report. All taxing bodies had their chance to enter an agreement; it’s a requirement of TIF creation that other taxing bodies be notified of the intent, and they would have negotiated to enter into an agreement before the district formed just like 58.   In 2009 the annual required payment of $131,000 for the TIF district generated revenue-sharing was paid for out of the Real Estate Fund (226) a non-TIF fund.  The dollars will go up every year.  It’s long past time this annually repeating expense came off the General Fund ledger and goes into the TIF ledger where it properly belongs.  Amend or rider the agreement so that the payments come from the TIF district funds rather than general funds.

This could be a repeating annual savings starting at about $135,000 for FY2011 if the village does this.

The village has been paying this since 2001.  Those funds should be paid back; from the TIF increment back into the general fund.  Those ten years of payments total about $400,000 as a one-time revenue source.

Bill the CBD TIF for every penny spent from the General Fund. Some monies have been returned; there may still be General Obligation debt payments paid via Real Estate taxes that have not been properly restored to the general fund.  This includes re-combing the records for originating bond fees, early stage P&I payments that were budgeted from RE taxes, and employee expenses that were billed to the village that should have been billed to the TIF District.  Examples of employee expenses might include village time spent on the AOTG agreement, time spent by public works employees working inside the TIF district, and any other employee expenses directly related to CBD or Ogden Ave TIF District functions.

The village probably did not bill every hour into the TIF District budget, but it should have, to accurately account for the true cost of the district.  Council and staff set the precedent last year of billing hours to specific purposes.  The village might consider exploring budgeting and billing the TIF Districts for hours spent on the TIF’s.  This is tying costs to the source, and accounting accurately the cost of the TIF Districts.

Also in 2009 there was a one-time transfer of $200,000 from the Real Estate Fund (226).  That $200,000 can be restored to the General Fund at some point in time.

Will this force an extension of the CBD TIF District?  The current debt structure already guaranteed years ago that the CBD TIF would need to be extended when it expires.  There may be prohibitions against this; the Illinois TIF Statutes make clear only that all expenses have to be accounted for, it does not provide categories of acceptable or  unacceptable expenses, nor does it appear to prohibit correcting past accounting oversights.  It also provides that any surplus be redistributed to the various taxing bodies (65 ILCS 5/11-74.4-7).

Combine reserve funds. The Parking Fund currently projects a cash balance of $500,000.  The Real Estate Fund has a cash balance of around $250,000.  There’s more fiunds and more cash reserves.  The village now knows exactly what a “rainy day” looks like.  Run the numbers for separate reserve funds, create a new General Reserve Fund in the budget, roll them in at an appropriate level.  No policy change about using reserves, just combine them into one reserve fund.

There might be $200,000-250,000 freed up one time by doing this.

Continuation of the Municipal Buildings Fund as a pay forward construction fund for a new civic center. A new civic center will not happen unless budgeting is as tight as a drumhead.  One way is to forward-fund a percentage of the project to offset interest costs on the debt balance borrowed.  Every dollar saved up front directly reduces TIC by 40 cents on the dollar.

Painful?  Yes.

The village will have to make do with existing facilities for several years?  Yes.

Use the opportunity to show the shared pain with taxpayers.  Everyone gives in hard times.  The conventional wisdom is spread the cost over the life of the project by borrowing.  Fire Station #2 showed there were significant savings to be had by saving money up front, and also by already owning the land, both of which eliminated substantial interest payments.  A new civic center needs costs blunted as much as is practical.

Sharing common cost across multiple jurisdictions. John Schofield President of Downers Grove Coalition for Managed Redevelopment, forwarded the concept of cross-jurisdictional cost cooperation.  Vehicle maintenance is one just one example.

This is already beginning.  Westmont and DG will soon share Ops Center expenses and personnel.  DG went to the cheaper suburban FIAT rather than going it alone with a dedicated SWAT team.  We now share one Fire Station coverage area with Woodridge-Darien.  Exploring shared use of like purposes provides savings via economy of scale.  If all your kids eat the same cereal, do you buy them each a box of the same cereal, or one bigger cheaper box?  If everyone buys paper, and one body uses so much they get a better deal, why not share that savings?

The unions have to help. There are two key labor contracts coming in 2011: fire and police, the two biggest personnel expenses.  Consider the concept of using dollars instead of percentages in the two union contract negotiations coming up, and try to peg those dollars uniformly across the ranks.  A $500 raise instead of a 1% raise saves several thousands by avoiding higher salaries triggering higher increases.  Freezing the size of the steps is imperative for sustainability without excessive downsizing.  Consider opening the books to the unions and asking them to help find the money-it isn’t there, and sometimes that is best discovered by all parties.  Keeping jobs is better than eliminating them to make ends meet.

Some of these might work, none of these might work, but it’s certainly worth looking at them all.  If any council member wants, they can  respond   with   their own suggestions and ideas.  Any email responses from elected officials will go up as a comment.

The village has added a page to its website explaining its share of residents’ property tax bills and linking to tax bill information presented by Assistant Village Manager Mike Baker at the May 4 council meeting.

The village also uploaded a video of Baker’s presentation to YouTube, which can be accessed by clicking here:  2009 Property Tax Bill Presentation

While the village has provided tax levy information in the past, this is the most extensive effort, said Doug Kozlowski, director of community relations.  “The tax bill presentation is “a continuation of the overall transparency we’ve tried to maintain as part of the long-range financial planning process.”

The village levies a specific dollar amount as opposed to a rate,  Kozlowski said. It accounts for about 10 percent of local property tax bills.

“We wanted to let people know that the decisions that impacted the tax bill were  made in a very strategic process and to let people know about the long-range financial planning recommendations that resulted in what they are seeing on their tax bill now,” he said. In addition to raising about $500,000 in new taxes, the village cut expenditures by $2.2 million, tapped reserves and took other strategic steps bridge its shortfall.

And that’s it for me. This year, I finally will file the appeal I’ve threatened so many times in the past. This year, I’ll stay on top of the county assessment calendar which allows for a brief 45-day filing window between the publication of assessments in October and the end of the appeals process in late November.

I’ve already downloaded my appeals form and have, to my escalating chagrin, begun poring over comparables in my neighborhood. I’ve learned, for example, that the fully rehabbed house across the street which sold for 80 percent more than my home pays less in property taxes. As does the house next door with a five-year-old addition. As do our other neighbors, who paid $100,000 more for their home three years ago. As does just about everyone else on the block living in a modest (i.e., less than 4,000-square-foot) dwelling. As do two families I looked up who put on new additions complete with updated kitchens and master baths within the last 18 months.

I’m ticked. Can you tell?

In total, our tax bill increased more than $200 in the past year, although the psychological impact of breaking the $6,000 barrier was far greater than the dollars and cents involved. The viilage increased its rate from 0.2158 to 0.2354 and its pension fund rate from 0.1127 to 0.1461 for a hike of about $24 and $42 respectively on my tax bill.

The school districts accounted for the other big increases: $125 more to D58, $55 to D99 and an additional $34 to the College of DuPage.

While I’m feeling bruised by my tax bill, I realize there are many residents paying far more, including a friend with a rambling, 3-bedroom ranch on a wide-ish lot who is now contributes $10,000 in annual property taxes. She’s ticked, too.

No wonder I’ve had no luck connecting to DuPage County Treasure Gwen Henry’s office (a constant busy signal) or to the county Supervisor of Assessments where a message informed me they are  “experiencing higher call volumes than normal.”

I don’t expect the bureaucrats at the county or the township to help much anyway. For real relief we’ll have to look to our lawmakers, who in true Cirque de Soliel fashion are juggling constituencies, walking the tightrope of competing demands and trying half-heartedly to crack a puny whip over the heads of the lumbering lobbies, such as the teachers’ union which, according to an April 15 letter from Rep. Sandy Pihos, had expressed concerns that “Illinois will lose high potential teacher candidates to other states with more generous pension systems” should reform legislation pass.

This is yet another verse of a very old tune, the one the band strikes up every time public employees attempt to make a case for more, more, better, better: That they will move en masse to a more generous state, school district, force, library, city if they aren’t paid a wage competitive with the best of the bunch.

In the private sector, those sentiments hold zero water. Because in the private sector, individuals using such tactics run the risk of someone — the boss — calling their bluff and inviting them to submit a resume to that better company in a far-flung state post-haste and don’t let the door hit you on your way out.

And from where I sit, with my state on the brink of insolvency and an ever-bigger tax bill in my hand, that far-flung state is actually looking pretty good.

Everyone on council agreed this was a tough budget to do, and in the end all but  Commissioner William Waldack voted for it. Several council members echoed Bruce Beckman’s request for a “debriefing” so that the good and bad of this year’s marathon process could be reviewed and improvements wrought.

Most council members had something they didn’t like about the budget.  Waldack had the best visual aids, using a can of soda to explain how little it would take to avoid the cuts, and comparing an apple core to an apple to explain the difference between what functions are necessary, what services are needed beyond that, and how the extra beyond a core minimum makes a community more complete.  His comments garnered applause from the audience.

Mayor Sandack kept coming back to a familiar theme: personnel expenses are outstripping the village’s ability to pay them: Here’s the dollars we have, here’s the things wanted.  We don’t have the money, math is math.  By stripping the budget this year, next year may be easier to figure out.

Going, going, gone

DARE is gone.  The two most junior patrol policemen are gone at the end of year.  Counseling and Social Services: also gone EOY, although it’s unclear whether the department director carries on. Community Events has been pared to just one person.  No open positions will be filled.  Community Grants are gone.  The village’s contribution to Meals on Wheels is gone.  The senior taxi subsidy continues at two-thirds its previous level.

Heritage Fest is gone as a village-enabled event.  The Ice Festival is gone as a village event, but will return as a smaller event over Valentine’s Day weekend (more on that in a later post).  The Criterion bike races are gone unless someone wants to pick up the reins.  Fourth of July parade and fireworks stay, tree-lighting and events at Thanksgiving stay, the Bike and Buggy parade stay.

Despite the cuts, taxes are up: The increase to a home with $300K market value will be somewhere around $48, depending on what gets abated.  Sales tax goes up .25% on July 1, 2010.

You can read the village press release here.  After noting to staff that the costs for Heritage Fest keep shifting around, the latest quoted is $494,000.  After earlier seeing the cost estimated $161,000, $30,000, $80,000, and $7,820, $494K seems a bit high.

Heritage Fest is dead.  Long live Heritage Fest.

David Humphries has served on the Community Events Commission for 26 years.  That’s one year less than the run of  Heritage Fest.  He made many pertinent points, including how HF generates about $40,000 in sales tax from sales at local businesses — revenues that are not reflected in the financial reckonings.

We’ve written before about how HF acts as a charity-giving leveraged multiplier, creating significant revenues for youth groups and not-for-profits; you name it, all get operating money from a HF event.   When it was decided the village was out of the HF business in 2010, some actual costs were not known — to decision-makers, to the CEC, or to the residents.  However, there is now a list of costs for events that require a permit, which any replacement for HF will be, so those will be known shortly.

I went to the CEC meeting ready to ask that the commission reach out to civic groups for help to keep HF going in 2010 and, wouldn’t you know it,  those groups were there too, volunteering to step up to keep an event going that had so many benefits, fiscal and otherwise, to the community.

Just another example how DG rocks.  There’s still more to be worked out, but the village can do a lot to make this happen this year as a cost-neutral event if they want to do it. Council voted last week to kill it for 2010.  If commissioners don’t throw any roadblocks down, Heritage Fest may still take place this coming year in that smaller, more focused format many DGreport readers have tossed around, incorporating ideas many have posited here and elsewhere.

But if Heritage Fest costs anywhere near the latest village estimate of $494,000, no civic group will be able to do it.

So far it looks like the Rotarians, Noon Lions, Chamber of Commerce, Downtown Management Corp. and the Economic Development Corporation are all willing to pitch in.  More planning help, more volunteer help will be needed.  For those willing to pitch in, stay tuned. The next Community Events Commission meeting is in two weeks.

Painting an unfortunate picture.

This is different.  The whole “praise people in public, criticize them in private” meme defined Ron Sandack’s first two years in office.  It led to fast meetings, unanimous votes,  jocularity and little dissenting opinion.

That normal good humor and jocularity got a kick in the teeth Wednesday night courtesy of Sandack himself, via Lucy Lloyd’s blog and her duplicate post on TribLocal titled  “Village Meeting Ends With Dissent: Mayor Ron Sandack Responds To Criticism”.  For apparently the first time Mayor Sandack went beyond the public record of his closing comments not to discuss an issue (he does that all the time), but to indicate his disagreement with and opine on the actions of  fellow council members (the unnamed Marilyn Schnell, Bruce Beckman and William Waldack), all of whom stated differing opinions about what to cut, what to keep, and how to balance a budget that has a well-documented gap.

Although Lloyd has made it clear her blog reports are off-limits, Sandack is a public figure who has released a public statement after the fact, after the vote, and after a documented terse closing commentary the previous night at a council meeting marked with differing viewpoints.

Quoted directly and exactly from The TribLocal, after the break the entire quote.

“The 2010 budget process has thus far been the most inclusive and detailed in recent memory; maybe the most open and transparent in Downers Grove’s entire history. It is instructive to recall this detailed and meticulous process to date because it objectively answers a hollow complaint proffered by some of my well-meaning colleagues. For the budget process began, in earnest, back in May of 2009, and included eight Long-Range Financial Planning meetings as a run up and introduction to the 2010 budget meetings. In total we have had 13 or so meetings where anyone in attendance was permitted an opportunity to raise issues and express themselves; including Council members. While persons of good will can and often do disagree– and I’d suggest this happens more often when times are economically tough — that does not mean there was no “compromise” or that an unfair process ensued. Anyone interested in the facts as to the Council’s process need only visit www.downers.us and read the minutes of all of the meetings or listen to the podcasts of them. Complaints about unfair process are objectively disproved there.

Admittedly, what has not occurred thus far has been the faintest hint of the past practice of horse-trading of programs or taxes or a return to some of the same old patch-work budget practices. If that is what is meant by some when they say “compromise,” then it is true that did not occur. This economy is a game-changer and it was agreed during our laborious meeting process that the Council needed to focus on the delivery and payment of core Village services and this Council methodically defined such core services. No, not everyone agreed fully but there was undeniable consensus, strong agreement in fact, that the Village could no longer provide all of the services it had in the past and must necessarily stay true to core…police, fire and public works. Because given the rising personnel expenses including pension obligations the Village, we could not continue under the “old way”; that was deemed by almost all to be entirely unsustainable. The record on this is replete that Council direction, clear and unmistakable, was achieved. Now when it is time to make the specific decisions and follow through with that Council direction, difficult no doubt, to stay core-focused, some pine for “compromise”–ill-defined and without price tags. Some even complain that there was a “process problem” or that there was no “compromise.” I humbly suggest that these are mere fall back positions, emotional reactions really, to the tough decisions that make many naturally uncomfortable. However this is when true leadership and follow through is required.”

Tuesday night Sandack was visibly frustrated by the differing opinions culminating in a closing comment that took all three commissioners to task for the “nay” votes that led to the 4-3 levy approval.

The next night he released the above statement via the Downers Grove Chronicle and TribLocal for public consumption.  As DGreport commenter and regular council meeting attendee John Schofield reported, tempers were dicey after that council meeting.

The usual council M.O. is there’s no surprises, everything gets vetted beforehand.  That must not have happened Tuesday night.

This is going to be a collaborative report, and will be modified.  I took what EJ wrote last night and spliced in my own notes, and she will do the same later.  I encourage everyone to chime in with their own thoughts, as a couple times I was caught in a “what the…” mode.  I’m sure EJ was not referring to my gray hair (note: I have less gray hair every day), but I’ve been watching budgets take form for a while now, and I’ve never seen anything like this 4-3 vote before, but there you go.

The National Championships of Cycling (“The granddaddy of Midwest cycling events”), last held August 15-16 on the scenic streets of Downers Grove are gone.  End of story.  There was no support on dais in favor of maintaining the annual Criterion races, which should ring a dinner bell for the other suburbs that have been licking their chops over the prospect of hosting this national sporting event.

As for Heritage Fest, a lot of time and talk was proffered tonight as staff rolled out a proposal to trim $90,000 in expenses, cut down to no more than three stages and downsize the whole thing, much as had been discussed here at DGreport.

Mayor Ron Sandack may have offered the best and most realistic long-term solution when he suggested suspending the event  in 2010 in order to give the Community Events department and Community Events commission time to reconfigure the fest and recruit private sources of support.

Commissioner Sean Durkin, when apprised that there have been no contracts for the event signed yet, said he would then just cut it, to which Mayor Sandack quickly interjected “If you were king for a day.”  (Laughter)

Durkin also offered that the fest was too spread out, and that the downtown had changed from when it first started.  There was a lot of talk about true cost of the fest, as Martin Tully commented elsewhere:

Heritage Festival cost the taxpayers $161,000 last year. As suspected, that figure is not derived from the operation of the festival, per se, but instead largely from the personnel costs associated with the community events staff that is charged with planning and running ALL events conducted in the Village.

Commissioner Marilyn Schnell said it’s hard to justify keeping a “$300,000 party” while cutting two policemen.  Commissioner Bob Barnett  said he was in favor of a severely reduced Heritage Fest, as a precursor to moving  it off the village dime and killing the Community Events Department.  Moving the village out of Heritage Fest doesn’t mean it would end, just that someone other than the village would provide it, he explained.

Commissioners Neustadt, Waldack, and Beckman agreed the annual blow-out needs to be down-sized.  Sandack suggested something more like a village-wide block party.  When HF started that’s kind of the vibe it had, before the bigger carny rides and food on a stick.  Commissioner Bill Waldack said that Heritage Fest is more than just a party, and it should be redirected to be more appropriate.

Stay thirsty at Fest my friends, and buy pop from Boy Scouts.

A Boy Scout from Troop 89 commented that selling pop at the fest allowed him and many others to finance their participation in scouting events.  As a former Scoutmaster (Troop 55, the finest in DG), I can verify that.  We paid scouts out of the money made to work the booth, which allowed several scouts to earn money for events such as summer camp which they would not have been able to otherwise attend.

Just one example that Heritage Fest does more for the community than just provide a pork chop on a stick.

So look for Heritage Fest to be modest this year, and if it can’t be moved outside the village budget it may disappear in 2011.  If you feel strongly pro or con on Heritage Fest, you might want to attend the Community Events Commission meeting on Thursday.

When each councilman did a summation, they were to say where the extra savings should go.  Neustadt said to keep the tax levy where it is and direct the savings to the general fund.  Waldack said to use it on seniors programs such as  Meals on Wheels and human services.

Durkin said to put it towards reducing the $900,010 draw from reserves, Schnell said to use it for cops or to reduce the tax levy or add back social services, Beckman said counseling and social services, and Barnett said any savings goes toward the deficit.

The meeting amped up when council members gave their final thoughts on the levy.  Waldack suggested that they raise the levy ceiling by $500,000 so they could continue to parse down what really needed to be cut and what might get a partial reprieve.

He said he was miffed that the use of reserves was being employed when they should have raised the sales tax long enough ago that it would kick in January 1 and provide the extra revenue the village needed.  He even cited former mayor Brian Krajewski as having set a good example.

Neustadt said he was okay with everything as it was.

Durkin asked about the library budget, which is up four percent, and Village Manager Dave Fieldman responded that the library board is an autonomous body outside of council control beyond the mayor’s responsibility to appoint board members.  Sandack just renewed six year terms for Library Board President Stephen Daniels  and member Kathy DiCola.

Beckman prefaced his remarks by relating his extensive budget experience as a D99 school board member.  He said good governance is built on compromise and that as a school board member he never once voted against a budget levy because it was a product of compromise.

This budget, he said, he would vote against because it represented no compromise, and he went on to list several examples of revenue sources ignored and cuts pushed through.  He held up the West Suburban Living magazine (see page 100)  and noted that most every item cited as making Downers Grove a great place to live was being cut completely, or in the case of Heritage Fest, cut back.

Beckmanwas not pleased that all of the fine arts and cultural support had been stripped out completely, but was particularly displeased that counseling and social services are to be completely shut down; to him and many others these were elements of the village character that helped define the village as a great place to live.  He ended by saying he would be voting “no” to a budget for the first time.

Barnett supported the staff recommended levy, noting that at this time there is no budget to make them all comfortable,  that no one thing defines us, and that none of the cuts are long-lived expenses.

Schnell said it’s disturbing alternative revenue sources have not been found.  “I can’t understand how we can tax our people 12 and a half percent but we won’t institute red-light cameras that will hit people who are breaking the law. ” She also indicated she would be voting no.

Sandack was agitated by the time his turn came.  “I’ve got  a colleague to my right who flippantly says let’s add $500,000 to the property tax, I’ve got a colleague to my left who says she in good conscience can’t raise what is being proposed even thought the vast majority of it is being jammed down out throats because they’re pension obligations, and I’ve got a colleague who says because we didn’t compromise on Counseling and Social Services he’s not going to vote  on the budget.”

“That’s not a lack of compromise, that’s a lack of consensus,” Sandack said.

The village cannot be all things to all people, he said, adding that a village dentist would be great, but when times got tough they’d be up there arguing about how could they stop this vital service.  Good leadership is not a popularity contest, he said, and the current math is irrefutable.

The village has to chop away to end up with a budget that allows for a sustainable government.  “How did we fund Meals on Wheels in the first place?” he asked rhetorically.  It was pretty obvious he was frustrated and maybe even tired when he called for a motion.

There were attempts to speak by Beckman and Waldack, but any Robert’s Rules devotee knows the time for talk was past once it got to that point.  Durkin read the motion-always a whopper as it includes all outstanding bond debt issuances, and the vote was taken.

AYES: Barnett, Durkin, Neustadt, Sandack.  NAYS: Beckman, Schnell, Waldack.

So what does it mean?

Right now, less than you’d think, although the vote sets a ceiling for how much the village can spend and, as a result,  how much it can raise property taxes.  The discussion will continue next week.

EJ will take this ball back and run with it tomorrow.  I’ll be back Friday.

Lost in the commotion

A very positive report by Greg Bedalov on the move by Dover Corp. to Downers Grove from New York City.  “From Park Avenue to Highland Avenue” was his quip, suggesting Mayor Sandack might call  Mayor Bloomberg to say no hard feelings.  Sandack did a “Yeah right he’d take my call.” rejoinder.  Levity and good news before the budget storm clouds moved in.

Huge upside here.  The Landmark V building, with DeVry and now Dover moving in, goes from zero percent occupied to more than 90 percent occupied.  Property taxes go from about $7,000 per year to about $700,000 per year.  Of that, the village gets about $70,000, D58 gets about $240,000 and D99 gets about $210,000.  Way to go!

Among notable Downers Grove delinquents are some banks: US Bank, Mutual Bank, Deutsche Bank, and First National Bank of Brookfield all have ended up holding property they have not paid taxes on.  Chicago Title and Trust too.  Several local and area builders, as well as speculators, have been caught up short, and have taken a pass on paying taxes.  This could be problematic.

One time high flyer Rosol Construction (Georgian Courts on Gilbert and Curtiss) was one of the first to encounter difficulties, but he may not be the last.  It only takes one or two homes sitting unsold, with a construction loan ticking away, eating away at profits.  In what some describe as a race against time to sell a home, time has gotten a sharp set of fangs.  One builder said earlier this year he’s almost dormant, just a couple solid contracts with buyers and remodeling work to tide him over to a better economy.  But there’s still spec homes out there, unsold, loans ticking away.

Not paying your taxes doesn’t mean you automatically lose your property.  Here in DuPage County, a tax sale creates a tax lien on a property that puts the lien holder first in line for any payment.  Depending on the type of property, owners have up to 2 1/2 years to pay off the lien and the interest.  For the banks, they may simply include it as a closing cost when they move the property off their holdings.  For the builders and speculators, it’s another way to use other people’s money as a bridge loan during hard times.  If a builder just finished a $1 million home in time for the downturn, that $10,000 delinquent tax payment (that might cost them 7% on the $10-20K when they finally sell) is worth it, especially with banks being so tight on bridge and construction loans right now.

It’s an arcane way to invest that’s not for beginners.  To start, here in DuPage you have to ante up a $500 participation fee, so homework is essential; you see a lot of tax lawyers at the auctions.  Sorry, the registration ended yesterday.

Going over DG delinquents a couple stood out because they are in our TIF districts:

4929 Forest LLC owes $76,259.42 in unpaid 2008 taxes on 16 units in the development at the same address.  You may remember the builder, Michael Prince, told the council to buzz off when he changed to cheaper building

Click on image for larger version.

materials midstream without approval.  Council did nothing then.  Now, his company, which is listed by the Secretary of State’s office as NGS (Not Good Standing) also has taken a pass on paying his 2008 taxes payable in 2009.  In a couple years there may screaming good deals on some luxury condos on Forest, but in the meantime the village is out almost $70,000 in increment taxes that all would have gone into village coffers.  Ouch.  It remains to be seen if these tax bills will get sold.  Being what they are, they have some value to a tax lien investor, and if/when they get auctioned off the money will go into the hopper and work its way back to Downers Grove months, perhaps a year, later than scheduled.

Records show at least 14 properties in arrears. Click on image for larger version.

An even more troubling sign of the tough times is Luxury Motors.  Through the various companies that make up Joseph Abbas’ holdings, he owns 14 or more properties along the 300 block of Ogden Avenue that total over 205,000 square feet of real estate including Luxury Motors, a Bentley dealership,  Downers Grove Saab, and properties that currently are home to Downers Grove Yamaha, LaMantia Builders, and others.

Mr. Abbas is $70,637.86 in arrears on his 2008 taxes. and his web of companies have several that, starting in December of 2007, have been involuntarily dissolved,  revoked, or not in good standing.  Only one was found to be both active and holding property locally.  3311 Charles, Inc. is listed at 330 Ogden, the empty corner of Fairview and Ogden,  which is also in tax arrears.

Luxury Motors was the high-flying car dealer that Downers Grove had a sales tax rebate agreement with that, pre-recession, generated several hundreds of thousands of dollars for the village, and rebated one year over $200,000 back to the car empire.  When times got tough car sales, especially luxury car sales, collapsed. Village Manager Dave Fieldman canceled the sales tax rebate agreement several months ago and has not made rebate payments for some time now, since Luxury Motors fell below the threshold. Credit Fieldman for looking out for us; we could have been paying them our sales tax dollars while they were not paying us our property tax dollars.

These properties have more intrinsic value at  tax auction than the luxury condos on Forest.  They’re commercial properties along a high traffic artery that’s just been repaired, and the tax bills will probably be auctioned off pretty readily.  It’s up to Joseph Abbas’ various surviving companies to repay the liens or walk away.

In either case, the largest sales tax generator in Downers Grove has been hammered by the economy and DG tax revenues have been hammered right along with them.  It remains to be seen if these tax bills will get sold.  When they get auctioned off the money will go into the hopper and work its way back to Downers Grove months late — like 4929 Forest perhaps a year later than scheduled — but better than never.

Can you blame Sandack and Barnett for the double team at the 11/3 council meeting about getting away from sales tax revenue because of the unknowns?  This was unknown two years ago, but it’s known now — and no one has the stomach for a repeat of relying too heavily on one sales tax giant again.

That’s not a bad thing.  Focus is a good business attribute, but diversity is a must.  Spreading revenue sources across many streams minimizes the damage one can do if it’s suddenly diminished.

Luxury Motors problems have a long-shot silver lining, a wild card that could actually kick start development along that section of Ogden.  With car sales crashing, they may not be able to raise the cash if they are over-leveraged.  It wouldn’t be a stretch for even a proxy to buy the tax bills and in two years or so assume the property ownership, washing away liquidated debt from failed businesses, but leaving extremely low-cost property ready to be developed and redeveloped.

As always,  our contribution will be more generous this year — by about $250 — despite the hard effort by the village council and the park board to keep their levies flat. The school districts are up by about $100 each, I see, and the cost of various other entities — the library, the forest preserve district, the village fire pensions — are up $10 or more.

I realize that such is the cost of living in a well-maintained, amenity-packed locale and, like most taxpayers, I’m willing to pay my fair share. But only my fair share.

And I’ve had my doubts for years.

The first indication that our taxes were out of whack with other nearby homes came when a rambling stucco on a 75-foot-wide lot sold a few years ago. The sellers had purchased the home when we bought ours and had immediately invested in an extreme and expensive makeover of all four floors.

When the house sold for more than twice what we’d paid for our home, I was shocked to learn the property taxes were more than $1,000 a year less than we’d been paying.

Unfortunately, I did not follow up on this information.  The discrepancy was so large I figured (hoped?) there must be some mistake. Besides, I’d heard horror stories about the futility of trying to buck an assessment.

I decided to wait a year — a year that became two or three.  I’d get all exercised whenever the real estate assessments were published but still didn’t take action.

Enter a good friend who decided she wasn’t going to suck up her $10,000 property tax bill without protest again. She lives in a three-bedroom ranch on a wide lot on a lovely Northwest Downers street, but it’s no McMansion. She did the initial legwork and now we’re both fired up and sharing our new-found knowledge with the disgruntled masses.

She clued me in about the Downers Grove Township Assessor’s database, where you can find property taxes posted for every house in your neighborhood.

I checked out my street and found, much to my distress, that the rehabbed house on the corner — four bedrooms, palatial master bath, large family room, office — which sold for $650,000 three years ago actually pays slightly less in property taxes than we pay over here in one-full-bath-land.

Grrrr.

The database also includes links — marked “PRC” at the far left of each address — to Residential Property Information sheets for each home. These allow you to compare apples to so-called apples.

For example, I discovered that my home is listed as about 1,500 square feet while the rehabbed four-bedroom house across the street boasts more than 2,700 square feet.  Which totally explains why I pay more in property taxes.

It gets worse. I discovered that among all the homes on my street, our property tax bill is among the highest, with most other comparably modest homes paying $500 to $1,000 less than we do. Granted we live in a brick house. But they aren’t gold bricks.

My  friend came up with similar results.  Now we both have to carefully choose three comparables and submit our appeals to the assessor’s office within 30 days of when the 2009 real estate assessments are published next fall.

Ever the enterprising entrepreneur, my friend thinks we should peddle our new-found knowledge of the system, offering our services to homeowners who want to appeal their tax bills, but don’t have the time or the initiative to do it themselves.

People like me, in other words.

Chicago Avenue. Montgomery Avenue. Prince Street. Barberry Court. Cumnor Road.

These are the locations of just a few of the Downers Grove homes slated for foreclosure by the DuPage County Sheriff’s Department in coming months. The docket for December 2 through May 5, 2009 — which runs for pages on the department’s web site — includes 41 local properties.

Throughout the county, foreclosures are significantly out-pacing the 2007 numbers. The sheriff’s office, which handles all county foreclosures, averaged about 15 per sale date in 2007; foreclosures currently are running at 25 to 27 per sale. The sales are held every Tuesday and Thursday, barring holidays, throughout the year.

The department has also seen a spike in proceeds, which have doubled since last year although fees have remained steady, a sheriff’s department spokesman said.

“We have seen more foreclosures in Downers Grove and Elmhurst that we did before,” he said, adding that the middle class is being effected more than usual.

Meanwhile, the county’s existing home sales declined by more than 25 percent between October 2007 and October 2008, according to a story in yesterday’s Chicago Tribune. The median price has dropped nine percent in the same period.

How will this impact local property tax assessments? It won’t until 2010, which is when the next general reassessment is scheduled to take place. Until then, tax bills will be determined by the previous three years of sales data, which was still aggressive in 2005 and 2006. Thus the six percent increase in EAV that our local taxing bodies are counting on in 2009.

So unless this slump turns around — and quickly — property tax bills should be expected to fall come 2011. That’s the good news. The bad news is that it will hit the coffers of the village, school districts and other taxing bodies where it hurts.