Geneva's downtown, already under siege with more vacancies than at any time in a generation, is seeing an unexpected and unprecedented 15 percent drop in its estimated assessed value.
What that means for downtown property owners is the prospect of having to pay a higher share of the costs for city services.
What it means for city officials is a complex problem: What services do you cut or what revenue sources do you increase to make up the estimated shortfall?
The downtown Special Services Area No. 1 was the No. 1 topic in an open-ended discussion Monday night at a special meeting of the the City Council's Committee of the Whole. Community Development Director Ellen Divita presented the council with a PowerPoint presentation that showed the SSA's estimated assessed value for 2012-13 at about $46.2 million.
If Township Assessor Denise Lacure's estimates are correct, the SSA's 2012-13 total assessed value represents a 15 percent drop from 2011-12 and a whopping 25.7 percent drop from 2010-11.
Total EAV of SSA No. 1
2012-13: $46,230,437 (estimated)
How could that happen? City officials are scratching their heads.
"We would like a better explanation," said City Administrator Mary McKittrick. "As we understanding it, it was the tax assessor who decided to lower the values on those properties on her own."
The decrease in assessed value translates to a decrease in revenue and puts the city between a rock and a hard place. Exacerbating the problem is a balloon debt schedule for the 2001 purchase of the former Seigel lumber yard lot that is now used for parking.
The city has to pay a little more than $30,000 for the next four years to retire that debt, but must pay $199,785 in the final payment year of 2016-17.
Other issues include a maintenance and capital projects schedule for city parking lots, as well as the Master Plan implementation that includes capital projects for additional downtown parking.
Some of the potential solutions:
- Defer parking lot reconstruction and maintenance.
- Cut services—snow plowing and streetscaping are examples.
- Implement a leasing fee for public lots filled by daytime employees.
- Add a local sales tax to SSA No. 1. The tax can be raised in increments of a quarter-cent.
- Establish another SSA for the business district for beautification.
- Bond to cover expenses.
The council generally agreed that the city's contribution should be about equal to the revenues gathered from the SSA. In past years, the ratio was as high as 2-to-1, with the city contributing a greater portion of the maintenance and capital improvements to the downtown.
First Ward Alderman Chuck Brown said he did not have an issue with the city paying for downtown services because the community as a whole does benefit from those services.
"Having a viable downtown is what makes Geneva Geneva," he said.