CREATIVE FINANCING REAL ESTATE TRANSFER TAX

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CREATIVE FINANCINGREAL 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

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Paul K. Pookie HalversonEmeritus2thegoodlife_at_c
omcast.net John R. McNuttPresident, Shales
McNutt ConstructionElgin, Il johnmcnutt_at_shalesmc
nutt.com847.622.1214 Stephen NelsonVice
President, School District 427,
SycamorePrincipal\Education Planner\AIA,
LEEDStudio-GC ArchitectureBIMRolling Meadows,
IL s.nelson_at_studiogc.com847.952.0545
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CREATIVE FINANCINGREAL ESTATE TRANSFER TAX

• What we will cover
• School District situation
• Need for revenue (unrestricted)
• Intergovernmental relations/cooperation
• Referendum
• Board of Education Policies
• Current Status
• Panel case studies question and
  answer

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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

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School District Situation

• Continuing moderate growth
• State funds
• Not timely
• Unreliable for planning (construction)
• Unfunded mandates
• Not consistent with local planning efforts

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Targeted SolutionReal 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

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Targeted SolutionReal 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)

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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)

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InterGovernmental CooperationProcess

• AdHoc Committee
• Sycamore City Council
• Sycamore City attorney review
• Sycamore adopted ordinance
• Included discussions on impact fees, transition
  fees, annexations
• Citizens Committee (broad based)

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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?

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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

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Board of EducationPolicies

• Fund Balance minimum targets
• Balanced Budgets adopted
• Abatement
• Moodys rating
• ASBO International Comprehensive Annual
  Financial Reporting excellence in reporting (CAFR)

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Current Status

• Court lawsuit in process
• Constitutionality?
• Federal and State
• Home rule
• School funding

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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

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Creative FinancingSchool District Challenge

• Contact for follow-up questions
• Steve Nelson
• Email s.nelson_at_studiogc.com
• John McNutt
• Email johnmcnutt_at_shalesmcnutt.com
• Paul Halverson
• Email 2thegoodlife_at_comcast.net

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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

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LEGAL AND PRACTICIAL STEPS FOR SCHOOL PROPERTY
MANAGEMENT

• Question and Answer

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LEGAL AND PRACTICIAL STEPS FOR SCHOOL PROPERTY
MANAGEMENT

• Biography/Vitae