Rockland Tax District
Ledgers & Journals
Since May 1, 2009
|
|
Cash
on hand April 30, 2009 |
|
290,256 |
|
|
+Taxes
Collected in June & Sept ‘09 (567,311
levied in Nov ’08) |
353,641 |
|
|
|
+Other
Revenues |
14,742 |
|
|
|
+Proceeds
from Asset Sales |
|
|
|
|
+/-
discrepancy |
|
|
|
|
-Operational Costs |
239,942 |
|
|
|
-District Expenses |
126,806 |
|
|
|
-Ambulance
Contract |
|
|
|
|
Cash
on hand April 30, 2010 |
|
291,891 |
|
|
+Taxes
Collected in June & Sept ‘10 (584,542
levied in Nov ’09) |
571,061 |
|
|
|
+Other
Revenues |
7,700 |
|
|
|
+Proceeds
from Asset Sales |
|
|
|
|
+/-
discrepancy |
|
|
|
|
-Operational Costs |
301,112 |
|
|
|
-District Expenses |
132,280 |
|
|
|
-Ambulance
Contract |
|
|
|
|
Cash on
hand April 30, 2011 |
|
437,260 |
|
|
+Taxes
Collected in June & Sept ‘11 (568,975
levied in Nov ’10) |
584,169 |
|
|
|
+Other
Revenues |
13,094 |
|
|
|
+Proceeds
from Asset Sales |
|
|
|
|
+/-
discrepancy |
|
|
|
|
-Operational Costs |
290,762 |
|
|
|
-District Expenses |
141,489 |
|
|
|
-Ambulance
Contract |
36,400 |
|
|
|
Cash
on hand April 30, 2012 |
|
565,872 |
|
|
+Taxes
Collected in June & Sept ‘12 (593,111
levied in Nov ’11) |
567,744 |
|
|
|
+Other
Revenues |
10,710 |
|
|
|
+Proceeds
from Asset Sales |
|
|
|
|
+/-
discrepancy |
|
|
|
|
-Operational Costs |
83,675 |
|
|
|
-District Expenses |
294,431 |
|
|
|
-Ambulance
Contract |
145,379 |
|
|
|
Cash
on hand April 30, 2013 |
|
620,841 |
|
|
+Taxes
Collected in June & Sept ‘13 (605,754
levied in Nov ’12) |
593,114 |
|
|
|
+Other
Revenues |
12,073 |
|
|
|
+Proceeds
from Asset Sales |
|
|
|
|
+/- discrepancy |
|
|
|
|
-Operational Costs |
428,976 |
|
|
|
-District Expenses |
173,460 |
|
|
|
-Ambulance
Contract |
163,085 |
|
|
|
Cash
on hand April 30, 2014 |
|
460,507 |
|
|
+Taxes
Collected in June & Sept ‘14 (616,874
levied in Nov ’13) |
605,059 |
|
|
|
+Other
Revenues |
10,902 |
|
|
|
+Proceeds
from Asset Sales |
|
|
|
|
+/-
discrepancy |
551 |
|
|
|
-Operational Costs |
488,856 |
|
|
|
-District Expenses |
172,881 |
|
|
|
-Ambulance
Contract |
186,065 |
|
|
|
Cash
on hand April 30, 2015 |
|
229,217 |
|
|
+Taxes
Collected in June & Sept ‘15 (624,913
levied in Nov ’14) |
616,861 |
|
|
|
+Other
Revenues |
10,658 |
|
|
|
+Proceeds
from Asset Sales |
20,000 |
|
|
|
+/-
discrepancy |
2929 |
|
|
|
-Operational Costs |
303,857 |
|
|
|
-District Expenses |
202,441 |
|
|
|
-Ambulance
Contract |
119,684 |
|
|
|
Cash on
hand April 30, 2016 |
|
253,683 |
|
|
+Taxes
Collected in June & Sept ‘16 (632,121
levied in Nov ’15) |
624,598 |
|
|
|
+Other
Revenues |
16,001 |
|
|
|
+Proceeds
from Asset Sales |
26,200 |
|
|
|
+/-
discrepancy |
-409 |
|
|
|
-Operational Costs |
314,542 |
|
|
|
-District Expenses |
195,654 |
|
|
|
-Ambulance
Contract |
104,504 |
|
|
|
Cash
on hand April 30, 2017 |
|
305,373 |
|
|
+Taxes
Collected in June & Sept ‘17 (639,230
levied in Nov ’16) |
631,263 |
|
|
|
+Other
Revenues |
9,285 |
|
|
|
+Proceeds
from Asset Sales |
|
|
|
|
+/-
discrepancy |
1,070 |
|
|
|
-Operational Costs |
270,531 |
|
|
|
-District Expenses |
197,079 |
|
|
|
-Ambulance
Contract |
115,000 |
|
|
|
Cash
on hand April 30, 2018 |
|
364,381 |
|
|
+Taxes
Collected in June & Sept ‘18 (655,198
levied on Nov 13, 2017) |
637,694 |
|
|
|
+Other
Revenues |
15,327 |
|
|
|
+Proceeds
from Asset Sales |
274,659 |
|
|
|
+/-
discrepancy |
-3,864 |
|
|
|
-Operational Costs |
120,541 |
|
|
|
-District Expenses |
301,105 |
|
|
|
-Fire
& Ambulance Contract |
262,500 |
|
|
|
Cash
on hand April 30, 2019 |
|
604,051 |
|
|
+Taxes
Collected in June & Sept ‘19 (671,128
levied on Nov 12, 2018) |
approx. 660,000 |
|
|
|
+Other
Revenues |
,000 |
|
|
|
+Proceeds
from Asset Sales |
,000 |
|
|
|
+/-
discrepancy |
,000 |
|
|
|
-Operational Costs |
,000 |
|
|
|
-District Expenses |
,000 |
|
|
|
-Fire
& Ambulance Contract |
450,000 |
|
|
|
Cash on
hand April 30, 2020 |
|
,000 |
|
|
+Taxes
Collected in June & Sept ‘20 (687,892
levied in Nov, 2019) |
approx. 670,000 |
|
|
|
+Other
Revenues |
,000 |
|
|
|
+Proceeds
from Asset Sales |
,000 |
|
|
|
+/-
discrepancy |
,000 |
|
|
|
-Operational Costs |
,000 |
|
|
|
-District Expenses |
,000 |
|
|
|
-Fire
& Ambulance Contract |
496,000 |
|
|
|
Cash
on hand April 30, 2021 |
|
,000 |
|
|
+Taxes
Collected in June & Sept ‘21 (_______
levied in Nov, 2020) |
,000 |
|
|
|
+Other
Revenues |
,000 |
|
|
|
+Proceeds
from Asset Sales |
,000 |
|
|
|
+/-
discrepancy |
,000 |
|
|
|
-Operational Costs |
,000 |
|
|
|
-District Expenses |
,000 |
|
|
|
-Fire
& Ambulance Contract |
approx. 510,000 |
|
|
|
Cash
on hand April 30, 2022 |
|
,000 |
Nota Bene: “Cash on Hand” is the sum of the three bank account balances.
“Taxes Collected” is listed in the FFPD
statement as “Total Lake County Collector.”
“Other Revenues” is the amount listed as “Total Income” except for
“Taxes Collected.”
“Proceeds from Asset Sales” is any listing in the FFPD statement
as “Sale of Assets.”
“District Expenses” is listed as “Administration” plus “Building
Operations” plus “New Building” through 2012 and “Total District Expense” plus
Total District” subsequently.
“Ambulance Contract” is as listed in the FFPD statement.
“Fire & Ambulance Contract” is according to the Fire And Ambulance Service Intergovernmental Agreement.
“Operational Costs” is the amount listed as “Total Expenses”
except for “District Expenses” and “Proceeds From
Asset Sales” and “[Fire &] Ambulance Contract” but including the amount
listed as Net Other Income.”
“discrepancy” is the difference between the net amount of the
journal balances for a given period and the change in the two ledger balances
bracketing that period.
All source data was supplied
by RFPD but any error of
interpretation is mine. -Don Russ
The purpose of the following table is to
compare the amount of tax money historically spent by the Fire Board and the
amount of tax money that the Fire Board has levied upon the property owners
within the District to the amount needed for annual payments of our new Service
Agreement with Libertyville and Lake Forest for the District. The green and red shading are provided only
to facilitate comparison – green-amounts are in the $500 thousands and
red-shaded amounts are in the $600 thousands.
|
|
FY
ending April
30 |
Spending |
Levy ordered the previous November(1) |
Intergovernmental Service Agreement Payment(2) |
|
|
|
2010 |
366,748 |
567,311 |
|
|
|
|
2011 |
433,392 |
584,542 |
|
|
|
|
2012 |
468,651 |
568,975 |
|
|
|
|
2013* |
523,485 |
593,111 |
|
|
|
|
2014* |
765,521 |
605,754 |
|
|
|
|
2015* |
847,251 |
616,874 |
|
|
|
|
2016* |
623,052 |
624,913 |
|
|
|
|
2017* |
615,109 |
632,121 |
|
|
|
|
2018* |
581,540 |
639,230 |
|
|
|
|
2019 |
688,010 |
655,198 |
262,500 |
(3,4)
|
|
|
2020* |
|
671,128 |
450,000 |
(4) |
|
|
2021* |
|
687,892 |
496,000 |
(4) |
|
|
2022* |
|
|
510,000 |
(5) |
|
|
2023* |
|
|
525,000 |
(5) |
|
|
2024* |
|
|
540,000 |
(5) |
|
|
2025* |
|
|
555,000 |
(5) |
|
|
2026 |
|
|
570,000 |
(5) |
|
|
2027 |
|
|
585,000 |
(5) |
|
|
2028 |
|
|
600,000 |
(5) |
|
|
2029 |
|
|
615,000 |
(5) |
|
|
2030 |
|
|
630,000 |
(5) |
*One
of the six years prior or following the transition year.
(1)..The Fire Board passes a resolution every November
instructing the County Collector how much real estate tax to collect the
following June and September from District residents. It is posted on the row that corresponds to
the fiscal year in which those collections are to be made.
(2)..This is the Fire And Ambulance Service Intergovernmental
Agreement which the Fire Board entered into on September 11, 2018 and took
effect on October 1, 2018.
(3)..Since the Agreement covered only seven months of the
first fiscal year (October 1st through April 30th) the
payment is only 7/12 of $450,000.
(4)..The payment in each of the first three years is a sum
certain, specified to the dollar in the Agreement.
(5)..In
FY 2022 and beyond, the Agreement provides for inflation, to wit: “…the Annual Service Fee to be paid by the
District shall increase based on the change in the Consumer Price Index
("CPI") as defined in the Property Tax Extension Limitation Law (35
ILCS 200/18-185); provided, however, that the Annual Service Fee will not
increase by more than the CPI or 4%, whichever is less.”
I
used a $15,000 increase each year which is probably high based on recent CPI
experience:
|
|
April To April |
CPI calculation |
|
|
2013 |
232.531/230.085=1.0106 or 1.06% |
|
|
2014 |
237.072/232.531=1.0195 or 1.95% |
|
|
2015 |
236.599/237.072=0.998004 or -2% |
|
|
2016 |
239.261/236.599=1.0113 or 1.13% |
|
|
2017 |
244.524/239.261=1.02200 or 2.2% |
|
|
2018 |
250.546/244.524=1.0246 or 2.46% |
|
|
2019 |
255.548/250.546=1.0199644 or 2% |
Notice that a one percent
increase in a half-million dollars is $5,000, not $15,000.
The numbers above this point, with the exception
of the April 30 “Cash On Hand” amounts, represent
annual cash flows. The bar chart below
reports monthly cash-on-hand levels that were found in the minutes posted on
the District’s website. (They are posted
to the reporting month and relate to the prior month-end) Starting September
2018, the District has made quarterly payments for the Fire & Rescue
Services contract every June, September, December and March. The only significance of the bar colors is to
indicate (in red) the months when real estate tax revenues are received. Notice that the balance reported in October
2019 (for September 30th) is the highest level of liquidity realized
in the entire history of the District.
FOUR NUMBERS:
Let’s say you have an appointment with
your doctor. Regardless of the reason for the appointment, the first thing they
do is to take basic measurements. They take
your temperature, blood pressure and other “vital statistics” because these are
the “objective facts” that any assessment demands.
Every financial entity also has vital
statistics. In the case of the RFPD they
are:
Annual Spending rate $659K p.a. (2013 – 2018)
Tax Levy Rate $619K p.a. (2013 – 2018)
Service Contract Rate $513K p.a. (2020 – 2025)
Cash on hand $834K (October 31, 2019)
These four numbers are objective facts that
define the history, health and direction of the District. Presented most simply, they are:
Spending 659
Levy 619
Contract 513
Cash 834
These are the vital statistics of the
RFPD.
The District fiscal year (FY) ended on
April 30, 2019 was a transition year.
For the first five months, we contracted for ambulance service. For the last seven months, we contracted for
ambulance and fire service.
Six years is a time period long enough
to establish an annual rate independent of annual fluctuation. The corresponding levy rate is more
stable. They do not reach so far into
the past as to be irrelevant to current operations. The future contract payments are also more
stable, adjusting for inflation only.
The first two vital statistics (659 and
619) are six-year averages of the actual behavior of the District prior to the
transition year. The annual contract
payment of 513 is an average of what we can expect at worst (most expensive) in
the six years following the transition year.
Notice that if inflation adjustments were only one percent p.a. then
instead of 513, the third vital statistic would be 497.
So the
first two numbers lag the third by seven years.
Inflation has been running about two percent per year in recent years,
and two percent compounded yearly for seven years is about fifteen
percent. So, to make the first two
numbers comparable to the third we might add $100 thousand to each of them as
follows:
Spending 659
+ 100
Levy 619
+ 100
Contract 513
Cash 834
That adjustment, however, does not
change the revealed history, health or direction of the District, as shall be
shown.
During the entire six-year period from
FY2013 through FY2018 inclusive, the district contracted for ambulance service
of several hundred calls per year. The
District serviced its own fire calls.
The district experiences “three or four” structure fires per year,
according to a past district official.
Total District spending is constrained
to ambulance and fire service only.
During the entire future six-year period from FY 2020 through 2025
inclusive, the ambulance and fire mission of the district is entirely addressed
by the 513. Any spending in excess of
513 is either a matter of administration (the lawyer and the website) of a
matter of cleaning-up past mistakes (the firehouse and the CRC.)
Firehouse costs are correctly reflected in
the 659 average spending level of the six years prior to the transition year
because our commitment to self-service fire calls requires not only a truck and
crew, but also the firehouse. The
decision of a prior board to build an expensive, five-bay firehouse is a sunk
cost and is not to be second-guessed to any useful end for this analysis.
The imminent disposition of the
firehouse, whether privately or through an eminent domain action, will
extinguish the related mortgage and the District will realize residual equity
as an increase of cash on hand. In other
words, firehouse costs are correctly NOT reflected in the 513 average contract
payment of the six years following the transition year. Notice however that if they were, the
effective cost (post-disposition) of the contract would be reduced.
This analysis is not an exercise in
cash-flow planning. It is possible to
become so distracted by bank fees and office supplies that one cannot see the
forest for the trees. This analysis is
concerned with broad objective facts that are summarized by these four vital
statistics of the District:
Prior
Spending 659
Prior
Levy 619
Future
Contract 513
Cash 834
It is instructive to note however that
the very existence of the Citizens Review Committee has hindered the
realization of the benefits arising from the disposition of the firehouse:
“After the meeting, Klujian
said he wanted to use the property for his work, and he does have the cash on
hand to process the transaction. However, he expressed caution about the
animosity that still exists with some Knollwood residents over the prior
board’s decision to outsource the community’s fire department services to the
point that a citizen’s committee is scheduled to start meeting next month to
examine the decision.
“’I’m hoping this is something I can do,
but I only want to be in there if an overwhelming majority of the citizens
approve of this,’ Klujian said.”
CONCLUSIONS:
In the Scope Section of our 3-ring
notebooks, Board Secretary Bernstein poses 14 issues. The first three are “financial” and are: (1) What is the financial impact of
outsourcing services vs. what was established as the former Knollwood Fire
Department, (2) what are the current operating costs vs. prior to Oct. 2018,
and (3) what will the future costs be for the RFPD for the next 5 years?
(1) What is the financial impact of
outsourcing services vs. what was established as the former Knollwood Fire
Department?
The
answer is 659 minus 513, annually.
659
(or 759, to make it comparable) was the established cost for the RFPD to
perform its essential mission of ambulance and fire service, that is: $659 thousand p.a.
The
annual cost of the IGA that fully addresses the essential mission is 513 – $513
thousand p.a., plus the lawyer and the website.
That is a savings of some ten thousand dollars per month.
Every
month, patch.com publishes a list of new foreclosures featuring five of
them. These are the homes of our
neighbors who had to move away because they could not afford to live here. As I write this, realtor.com lists fourteen
homes in the Lake Bluff and Lake Forest zip codes that are currently offered
for sale because of foreclosures. We
could ask those neighbors what they think about the RFPD squandering $10
thousand per month, every month, month after month after month. Except that they are ex-neighbors now.
(2) What are the current operating costs
vs. prior to Oct. 2018?
The answer is 659 minus 513, annually.
659 (or 759, to make it comparable) was
the established cost for the RFPD to perform its essential mission of ambulance
and fire service, that is: $659 thousand
p.a.
The annual cost of the IGA that fully
addresses the essential mission is 513 – $513 thousand p.a., plus the lawyer
and the website. That is a savings of
some ten thousand dollars per month.
Every week, patch.com publishes a list
of new foreclosures. These are the homes
of our neighbors who had to move away because they could not afford to live
here. As I write this, realtor.com lists
fourteen homes in the Lake Bluff and Lake Forest zip codes that are currently
offered for sale because of foreclosures.
We could ask those neighbors what they think about the RFPD squandering
$10 thousand per month, every month, month after month after month. Except that they are ex-neighbors now.
(3) What will the future costs be for
the RFPD for the next 5 years?
The answer is 513, plus administration,
per year.
The annual cost of the IGA that fully
addresses the essential mission of the District is 513 – $513 thousand p.a.
(plus the lawyer and the website).
Recall the District’s vital statistics:
Prior Spending 659
Prior Levy 619
Future Contract 513
Cash 834
Notice that the levy level of 619 (or
719, to make it comparable) exceeds 513 by about $100 thousand (or $200 thousand)
p.a., which means that every 12 months the District takes the equivalent of
14.5 months of contract payments from the taxpayers. The surplus is far in excess of the cost of
the lawyer and the website.
And notice further that the annual levy
could be entirely suspended for a year to no ill effect. The District has $834 thousand (according to
the most recently published minutes, those of the November 11th
meeting) of idle cash sitting in the bank.
That is the equivalent of 19.5 months of contract payments. If there are 756 households in Knollwood and
The Sanctuary, then the 834 represents $1,100 on average that would have
otherwise been part of the bank balances of those households. There is no other local tax district that has
such deep reserves.
Prior
to the new contract, annual operations were 659 minus 619; that is to say: Our spending exceeded our
levy. In the private sector, that cannot
continue for long. Inefficiencies and
bad decisions drive private entities to bankruptcy. Bankruptcy is inherently a private-sector
phenomenon, however. In the public
sector, such as the RFPD, the public entity simply raises taxes to pay for its
inefficiencies and bad decisions.
Prior to the new contract, annual
operations were 659 minus 619, which is to say we were headed for either
“bankruptcy” or higher taxes.
Post-contract, we are levying 14.5 months of contract payments every
year even though we have 19.5 months of contract payments sitting in the bank. And that’s not counting the windfall from
selling the firehouse.
RFPD is not a community center. It has no business spending the taxpayers’
money on “making Knollwood a friendly, happy place.” It is a tax district. Its sole mission is to provide adequate fire
& rescue for the minimal price. The
new contract does that much better than the self-service arrangement.