proposed west humboldt park ssa public meeting nia center may 1, 2013

Proposed West Humboldt Park SSAPublic Meeting

Nia Center

May 1, 2013

2

Outline

Karen J. Forté, City of Chicago SSA Overview

Chet Jackson, WHPDC Planned 2014 services and budget

Jewell Walton & Geoff Dickinson, SB Friedman Financial Analyses

Special Service Areas (SSAs)

SSA #49 South Shore &

Andrew J. MooneyCommissioner

What is an SSA?

Special real estate taxing district, not an agency

The City as the taxing body contracts with entities to administer SSA programs

Funds additional services beyond the City’s general services in a defined district

Tax % rate applied to EAV generates levy is DIFFERENT than the tax % increase on a tax bill from the SSA tax

Enabled through state statute and city ordinance

Called BIDs (Business Improvement Districts) in other cities; BIDs used worldwide

• A good ROI• Be smarter about

sanitation services• Help police reduce

crime• Help ex-offender re-

entry• Lease vacancies• Support

manufacturers• Offer free wifi in SSAs• Bring new visitors to

Chicago• Focus community

advocacy & leadership• Master planning• Create accountability

with taxing privilege• Create more desirable

neighborhoods• Leverage City

resources, both financial and human

Achievements

Current & New SSAs

• 47 active SSAs

• 40 Service Provider Agencies

• 350+ Commissioners

• Oldest SSA created in 1977

• 70% increase in last 10 years

• 2013 Budgets = $27 million

CITY OF CHICAGOCITY OF

CHICAGO

City Council (legislative)City Council (legislative)

SSA Commission (advisory)SSA Commission (advisory)

Service Provider Agreement

Service Provider Agreement

Service Provider Agency

(Management/Admin) Service Provider Agency

(Management/Admin)

SubcontractorsSubcontractors

AssessorAssessor TreasurerTreasurer

COOK COUNTY

COOK COUNTY

HEDHEDDept.

of LawDept.

of Law

SSA Bank Acct

SSA Bank Acct

City Comptroller

City Comptroller

OBMOBM Other City Depts.Other City Depts.

Typical Authorized Servicesmaintenance and beautification activities

new construction (e.g. minor streetscape improvements)

coordinated marketing and promotional activities

parking and transit programs

area strategic planning

business retention/recruitment initiatives

building rehab activities (façade)

security services

other technical assistance activities to promote community and economic development.

Work plans assembled annually from this list.

SSA Services Gallery

PUBLIC WAY MAINTENANCE

AESTHETICS Streetscape Maintenance & Landscaping

Advertising & Promotion

Façade Improvements & Pre-Development Costs

Parking /Transit/Accessibility

SSA #10 Back of the Yards

SSA #2 Belmont-Central

SSA #5 Commercial Ave.

Safety & Security

Types of security:– Foot Patrol– Surveillance Cameras– Store Security Rebates– Cell Phones for CPD– Coordination w/CAPS

Tenant Retention & Attraction

SSA Outreach & Communications

1) Tax Rate Cap (citywide average: 0.50%)2) Annual Tax Rate (% may vary annually)3) EAV (Equalized Assessed Value set by County)4) Levy (citywide range: $60k - $1.3 million; ave.

$250k)5) Carry Over (unspent and/or previous years

taxes)

SSA Fund Mechanism: Common Terms

Budget = Levy + Carry Over Example: $300,000 = $270,000 = $30,000

Levy = Tax Rate x EAVExample: $270,000 = 0.45% x $60 million (tax cap is 0.50%)

Legislation

Key Legislation for SSAs

• Illinois State Statute: SSA Tax Law• City Ordinances • Open Meetings Act• Freedom of Information Act• Governmental Ethics Ordinance

Legislation – City Ordinances

• Establishment Ordinance– Boundaries– Term– Tax Rate Cap– Commission: Qualifications, Appointment, Powers– Authorizes HED to enter into Mgmt. Agreement

• Levy Ordinance – Annual levy and associated tax rate– Budget (levy + carry-over)

• Management Agreement Ordinance

Illinois Statute: SSA Tax Law

City Ordinances Open Meetings Act

Freedom of Information Act

Legislation – Service Provider Agreement

• Empowers agency to deliver services/spend funds

• Annual services and budget• Commission approves expenditures and

subcontracts• Performance standards• Conflicts of Interest• Contract Default

– HED Commissioner issues notice to improve– If no improvement, Provider subject to sanctions & termination

Illinois Statute: SSA Tax Law

City Ordinances Open Meetings Act

Freedom of Information Act

Legislation – Open Meetings Act

• Public Notice– Beginning each year, prepare and give notice of meeting

schedule– Agenda posted at Agency office and mtg. location 48 hours

before mtg.– 10-day notice in newspaper required for meeting changes

• Meeting Minutes– Meeting defined as gathering of majority of quorum of

Commissioners– Include meeting date, time and place– Record Commissioners as present or absent– Summary of discussion on all matters proposed, deliberated,

or decided, and record of any votes taken – Approved minutes open to public within 7 days– No SSA business can be done via email Illinois Statute: SSA Tax Law

City Ordinances

Open Meetings Act Freedom of Information Act

Legislation – Freedom of Information Act

• Public Records– reports, maps, letters, etc. received by the

Commission– info in SSA related accounts, contracts, etc. – Exempt: invasions of personal privacy, personnel

records, RFP prep, and actual bids/proposals until awarded

– Service Provider records requested/archived by City

• FOIA Requests– Submitted to HED or Commission, NOT the

Agency– 7 days to reply– If info is readily available, provider should

cooperate w/o a FOIA request Illinois Statute: SSA Tax Law

City Ordinances

Open Meetings Act

Freedom of Information Act

From the Chicago Tribune

Governance

• 47 SSA Commissions

• Seats range from 6 to 16; ave. 9

• Typically meet quarterly

• Executive seats typically Chair, Secretary, Treasurer

• No more than 1/3 of Commissioners should also serve as Agency Board Members due to need for recusal – no overlap is recommended

Governance - SSA Commissions

Governance - SSA Commissions

• Establishment Ordinance creates Commissions– Extension of, not separate from, the City– Name of Commissions – Number of seats and term lengths for each commission– Appointment process– Chairperson term lengths

• Establishment Ordinance lists Commission powers– To Recommend Annually:

• Services• Budget • Service Provider

• Establishment Ordinance authorizes creating bylaws for procedural operation

• SSA Ordinances supercede SSA bylaws

• Separate/distinct from Agency bylaws

• Negotiable items for each SSA:– Executive seats– Mtg frequency beyond Open Mtgs Act (semi-annually)– Attendance requirements– Voting– Committees– Amending bylaws

Governance - SSA Commission Bylaws

Management

• 42 Service Providers (Agencies)– 30 Chambers or Business Associations- 3 Development Corporations– 3 Industrial Organizations– 5 Human or Civic Service Organizations

• All are non-profits

• Staffing scenarios to manage the SSA:– Executive Director only or part of their time– Shared Agency/SSA staff person– FT SSA Program Manager– Multiple staff support– Outsourced administration

Management – Service Providers

• Commissioner– Dept. of Finance (DOF) Debt checks– Dept. of Consumer Services (DOCS) Child Support

Indebtedness Checks– City & County Boards of Ethics Stmts of Financial Interest

(mailed to commissioner after appointment)– Aldermanic & Mayor’s Office Application Review

• Service Provider– DOF & DOCS checks on President, Treasurer, Ex. Dir.– EDS for Agency Organization – list SSA subcontractors– Proof of Agency Organization in Good Standing with State

Vetting Overview

2014 SSA Creation Timeline

Winter 2012

June 2013

Oct-Dec 2013

By Dec 2013

Jan 2014

Fall 2014

Resea

rch &

Consensu

s Build

ing

SSA Applic

atio

n Subm

ittal

Ordin

ance

s &

Comm

issi

on Appts

.

County F

iling &

Rec

ordin

g

Tax

Levy

Collect

ed/

Distri

buted

SSA Beg

ins

Making the SSA a realityLocal championsVision & Mission for the corridorsCoordinated SSA Development Plan

Financial support (reimbursable SSA cost)

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Mission & Vision Statements*

MISSION: The West Humboldt Park Development Council, Alderman Walter Burnett, Jr, and vested business and property owners, have combined their resources, in order to foster commercial revitalization, economic development and create a bold vision for the Chicago Avenue corridor and West Humboldt Park. The goal of West Humboldt Park Special Service Area (SSA) is to position the Chicago Avenue commercial corridor as a desirable, safe, pedestrian-friendly destination, which will attract residents and visitors more frequently, attract new businesses and commercial development, strengthen existing businesses, and improve the overall quality of life.

VISION: The West Humboldt Park Special Service Area is being created to promote and encourage investment and revitalization along the Chicago Avenue commercial corridor. It is funded through a special property tax levy to provide supplemental programs and services to the area that are above and beyond the services provided by the City of Chicago. The general boundary of the SSA includes both sides of Chicago Avenue between Albany on the east to Karlov on the west.

Planned SSA services include maintenance programs, marketing campaigns, security, and other improvements that would benefit the commercial district. These services support efforts to promote investment and revitalization along the Chicago Avenue commercial corridor and to improve the overall quality of life in West Humboldt Park.

SSA funding is controlled and directed locally by an SSA Commission comprised of local business and/or property owners. All funding stays within the SSA for local direct benefit.

*Draft

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Chicago Avenue Existing Conditions Currently Chicago Avenue exhibits a need for

increased clean-up, security, and investment.

Chicago & St Louis

Chicago & Sawyer

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Chicago Avenue Existing Conditions Currently Chicago Avenue exhibits a need for

increased clean-up, security, and investment.

Chicago & Homan

Chicago & Hamlin

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Sample 3-Year SSA Budget$115,000 with 3% annual increase

Program Category Chicago Avenue SSA Estimated Budget Year 1 Year 2 Year 3

Advertising & Promotion 3,900 4,017 Public Way Maintenance 18,000 35,540 36,606 Public Way Aesthetics 5,000 5,150 5,305

Tenant Attraction/Retention 5,300 Façade Improvements 5,000

Parking / Transit / Accessibility Safety Programs 45,219 46,576 47,973 District Planning 30,000 10,000

Other Technical Assistance Personnel 12,781 13,164 13,559 Admin. Non-Personnel 2,000 2,060 2,122

Loss Collection (unpaid taxes) 2,000 2,060 2,122 115,000 118,450 122,004 SSA Budget 115,000 118,450 122,004 Tax Rate 1.16% 1.19% 1.23%Tax Rate Cap 1.50% 1.50% 1.50%

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Proposed SSA Geography

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Proposed SSA Parcels and EAV

262 total parcels

21%

3%

8%

12%

22%

34%

2%8%

4%

24%

61%

21%3%

8%

12%22%

34%

Exempt Single Family ResidentialMulti unit (Residential only) Vacant or Minimally Improved landMixed Use (Commercial and Residential) Commercial/Industrial

Parcel Distribution

EAV Distribution

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Total tax base and TIF impacts

2011 Total EAV $15.3 million

2011 TIF Base EAV $9.9 million

Because the SSA is 100% in TIF districts, SSA revenues can only collected from the TIF Base EAV

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SSA Tax and Rate Cap

Proposed Estimated 2014 SSA RateThis rate is for a $115,000 first year SSA budget.

2011 Tax Rate 5.455%

Est. Proposed SSA Rate 1.159%

New Est. Tax Rate 6.614%

Proposed SSA Rate CapThis rate is the maximum rate that

could be levied during the SSA’s 10 years.

1.500%

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Effects of 1.159% SSA Tax Rate

% Increase in Tax Bill 21%

Max. Tax Increase $6,700

Average Increase for nonexempt (annual) $860

Median Increase for nonexempt (annual) $440

Exempt <$250 $250 to 500 $500 to 750 $750 to 1250 $1250 to 2500 >$2500 -

10

20

30

40

50

60

70

56

40 46

42 39

27

12

Distribution of Annual Property Tax Increases: $115,000 SSA Budget

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SSA Effects on Tax BillTotal Taxes due will increase by approx. 20% next year.

In this example, Total Taxes Due would be $5,742

An additional line will be added for the SSA with a rate of 1.159% and a maximum rate of 1.500%.

In this example, taxes for the SSA would be $1,007.

Total tax rate would increase to 6.614%.

Each installment would be approx. 20% higher.

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Summary

Major areas of 2014 spending at $115,000 budget Safety programs Cleaning/public way maintenance

Leverage source for grants etc. Future budgets

Refine future budgets based on stakeholder feedback

Plan to hold line of vendors as possible Some start up costs go away Potential future SSA services

• Marketing/Advertising• Façade rebate program (coupled with SBIF)

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Discussion