Special Service Area #14
A special service area (SSA) is a taxing mechanism that may be used to fund a wide range of special or additional services and/or physical improvements in a defined geographic area within a municipality; retail districts and central business districts are frequently included in an SSA. Among the list of common services and activities provided by SSAs are support services, such as special events; infrastructure improvements, such as parking lots or garages; and land and building improvements, such as storefront improvements.
In 2017, the Hinsdale Village Board approved an agreement with Community Consolidated School District 181 to construct a parking deck in the CBD in conjunction with the construction of a new middle school. The total cost of the parking deck is currently estimated at $7.6 million. The proposed SSA in the Hinsdale CBD would be established for the purpose of funding the incremental cost of the larger of two parking deck options that were considered by the Village Board in August 2017. The proposed SSA will be designed to recover a portion of the debt service costs for the parking deck from an annual real estate tax that will be levied on all taxable properties in the SSA over the next 20 years.
Who is responsible for the SSA tax?
The property owner of record is ultimately responsible for the payment of the SSA tax.
How is the SSA tax allocated among property owners?
The SSA tax is allocated based on each tax parcel’s proportionate share of the total equalized assessed value of all tax parcels located in the SSA.
How many property owners will be paying the SSA Tax?
There are 82 tax paying parcels and nine tax exempt parcels that will be included in the SSA.
How will the annual tax levy amount be determined?
The Village will be selling general obligation bonds to finance the construction of the parking deck and other infrastructure improvements. Based on the results of this bond sale, a portion of the annual debt service amount will be allocated to the Special Service Area. Based on current market rates, the total annual SSA tax levy is estimated at $70,000 and will last for 20 years.
Who will bill and collect the tax?
DuPage County will bill and collect the tax in conjunction with the regular semi-annual real estate bill.
When is the SSA tax due and who will notify me?
The SSA tax is payable in June and September each year along with general property taxes. It will appear as a separate line item on your regular tax bill from DuPage County; you will not receive a separate bill for the SSA tax.
Is the SSA tax deductible for the property owner?
Please consult with your tax advisor on this issue.
When will the SSA tax start and how long will it last?
The Village plans to begin levying the SSA tax for tax year 2018 that will be due and payable in June and September of 2019. The levying of the SSA tax is expected to last for 20 years.
How does the failure of one property owner to pay its Special Service tax affect other property owners?
Failure of any property owner to pay the SSA tax has no impact on the tax assessed for any other property owner.
How is the SSA tax disclosed to a future property purchaser?
A copy of the SSA ordinance will be filed with the County Clerk and the Recorder of Deeds so that a parcel’s inclusion in the SSA will be disclosed on a title report.
How much will my tax be?
The annual SSA real estate tax will be limited to the "Maximum Tax Rate” that will be included in the establishing ordinance. It is estimated that the SSA tax will result in a real estate tax increase of approximately 5.67% based on the total property tax bill for the 2016 tax year that was payable in calendar year 2017. The median increase is estimated at $705 per year for 20 years.
What is the rate of the "Maximum Tax Rate" included in the establishing ordinance?
In order to collect $70,000 from the SSA tax payers, the SSA tax rate would be 0.2993 per $100 of Equalized Assessed Valuation (EAV) based in the 2016 tax levy year. The maximum tax rate provided for in the establishing ordinance has been set at 0.3742 per $100 of EAV, which is approximately 125% of the rate currently required. The maximum tax rate has been set at this higher rate in case there is ever a decline in the total EAV for the SSA. This is done to ensure that the Village is still able to collect the SSA share of the debt service on bonds the Village will be issuing. It is expected that the total annual amount of SSA tax (currently estimated at $70,000/yr.) that will be collected from all properties in the SSA will be consistent for the entire 20 year period.
Will the amount of the SSA tax to the individual properties be fixed for the entire 20 year period?
No. The annual amount of each tax parcel’s share will vary slightly due to changes in assessed value of all of the properties in the SSA. These annual changes are not expected to be significant unless there is a material change in the assessment for a particular property. A significant change in assessment can come from major improvements to your property, a successful tax assessment protest, or a significant change in the market value for the property. In these types of cases the amount of the SSA tax can change by a material amount.
How will I know if my property is included in the SSA?
State statutes require that notice be given by mail to all of the taxpayers of record in the proposed SSA. It is expected that this notice will be mailed around June 21, 2018. The mailing will include the following information, all of which is required by law:
- SSA boundaries by legal description and street location (if available)
- PIN number of each parcel located within the area
- Proposed tax rate limit
- Proposed maximum number of years that the SSA tax levy will be imposed
- The nature of the proposed special services
- Statement as to whether the proposed special services are for new construction, maintenance, or other purposes
- Public hearing date, time, and location
- Proposed amount of the tax levy for special services for the initial year
When is the legally required public hearing being held for the creation of the SSA?
The public hearing will be held at 7:30 p.m. on July 17, 2018. At the public hearing, all interested persons affected by the formation of the SSA will be given an opportunity to be heard regarding the formation of and the boundaries of the SSA and may object to the formation of the area, the issuance of bonds or other debt instruments, or a loan from the Village, and the levy of taxes affecting said area.
What happens after the public hearing?
State statutes require that there be a 60 day waiting period at the conclusion of the public hearing prior to formally establishing the SSA. It is during this time period that petitions can be filed to stop the Village from creating the SSA. In order to stop the creation of the SSA, within 60 days after the public hearing the Village Clerk must receive petitions signed by at least fifty-one percent (51%) of the electors residing within the SSA and by at least fifty-one percent (51%) of the owners of record of the land included within the boundaries of the SSA.
What will happen if petitions are filed to stop the creation of the SSA?
The Village Board decided to proceed with construction of the larger parking deck at its meeting on August 3, 2017. There were many members of the business community at this meeting that were there to support the construction of the larger parking deck. At this time, it was publicly stated that the Village Board would be looking to the Central Business District to fund the incremental cost of the larger parking deck. The Village Board believes that creating a SSA is the most efficient and fair way to accomplish this goal. Should the Village receive petitions that stop the creation of the SSA, other taxes and fee increases will be considered. The Village Board remains committed to having the businesses in the CBD (who stand to benefit most from the parking deck) contribute to the cost of the larger parking deck.