The Riverside Village Board on Dec. 3 will seek to raise the tax levy that pays for village services and the operation by almost 4 percent, to $5,969,343.

Each year non-home rule taxing bodies in Illinois, like the village of Riverside, are allowed to increase property taxes by 5 percent or the level of the consumer price index, whichever is less. For the 2012 levy, for taxes to be collected in 2013, the CPI is 3 percent.

However, the village is asking for an amount greater than that to capture revenue related to new development in the village, which is not limited by tax caps. As a result, while the village will likely collect a levy that’s a bit less than the 4 percent they’re asking for, it’ll probably be a bit more than the 3 percent CPI figure.

This also doesn’t mean that residents’ property tax bills will increase by about 3 percent next year. The village’s portion of an annual tax bill is less than 20 percent of the total. The majority of the tax burden comes from local school districts.

On Monday, the village board held a public hearing on the tax levy and heard a first reading of the tax levy ordinance, which trustees will vote to approve on Dec. 3. There were no comments on the proposed levy by members of the public.

The portion of the 2012 tax levy for village operations alone amounts to about $4.4 million, with about $1.8 million of that figure going toward police and fire protection and paramedic services.

About $1.2 million is slated to pay for general village operations, about $200,000 for public works and about $225,000 for recreation. The village is also levying $614,000 to fund police pensions.

Riverside will also levy about almost $1 million – about half of which will end up being abated – to cover the village’s debt obligations.

The Riverside Public Library has proposed extending its tax levy by about 3 percent to $996,000. Of that figure, $726,175 will go toward paying personnel.

Board split over capital funding

Also on Monday, the village board heard a first reading of Riverside 2013 budget ordinance. Trustees will vote on the budget at their Dec. 3 meeting, but there appears to be a split on the board with respect to the document.

While the budget is expected to receive a majority of the board’s support in December, trustees remained divided over the issue of funding capital projects and how the board chooses to depict its financial position with regard to its cash reserves.

The final budget is balanced by the thinnest of margins – $16 – the result of a decision on Nov. 5 to use a portion of a liability insurance surplus to cover what would have otherwise been an $18,000 shortfall.

If the budget holds true, the village by the end of 2013 will have nearly $6.4 million in operating reserves. But Trustee Joseph Ballerine on Monday pointed out that the village’s cash reserve for capital projects and other large equipment purchases is running dangerously low.

One purchase hanging over the board’s head is for fire department breathing equipment. While the village has applied for a grant to pay for the purchase, the grant is not guaranteed. If the village is forced to pay for the equipment on its own, said Ballerine, the village’s capital projects fund will be firmly in the red.

His suggestion Monday was for the board to agree to declare to use any surplus in 2013 specifically for capital projects.

“If we don’t get the grant, our [capital projects fund] would have a negative balance at year end by $88,000,” Ballerine said.

Trustee Lonnie Sacchi, the board’s finance chairman, said he didn’t support making such a policy decision on the spot.

Meanwhile, Trustee Jean Sussman said she supported transferring some of the village’s undesignated operating reserve to fund capital projects or designated a portion of the annual tax levy for such expenses.

Having the money sit idle in reserve, she said gave residents a false sense of the village’s financial strength.

“The purpose of the [tax] levy is not to set up a savings account,” said Sussman. “We’re deliberately misleading residents.”

Village Michael Gorman rejected that conclusion, telling Sussman, “The allegation that the board is misleading the public is just bizarre.”

Sacchi said that part of his objection to using a year-end budget surplus for funding capital items is that it’s too uncertain. He suggested pledging sales tax revenue for such expenditures.

“I’d rather give it a consistent and relatively stable revenue source,” Sacchi said.

But Sussman argued that sales tax revenues were used to balance the operating budget. If that revenue was taken away, the village would have to make additional service cuts.

While trustees voted 3 to 2 (Sacchi and James Reynolds voted no) to accept Ballerine’s suggestion of using a year-end surplus for capital projects in 2013, Village Attorney Lance Malina stated he believed such a policy needed four votes to pass. Gorman did not cast a vote and Trustee Mark Shevitz was absent.

The board is likely to revisit the subject in December when all trustees are present.@