Mayor Calls Special Meeting to Discuss Residential SSA Abatements

Yorkville Mayor Gary Golinski called a special meeting Tuesday night to discuss the proposed SSA abatement ordinances for Raintree Village, Windett Ridge Homeowners Association, and Grande Reserve central.

This discussion will be focused on the summer 2013 SSA property taxes for those subdivisions. Council originally planned to discuss these abatements during the Jan. 8 council meeting. However the abatement ordinances were tabled after Ward 1 Alderman Carlo Colosimo, serving as Mayor Pro Tem, said residents of those communities wanted to meet in order to discuss the process.

Special Service Areas were created as a financing mechanism for subdivisions to allow the cost of the infrastructure to be bonded by the cities, and for the repayment of those obligations to be put on a property tax bill for each subsequent property owner, including vacant property owners. According to city documents, when the SSAs for those subdivisions were created, city officials “approved various bond ordinances and agreements that made certain promises to bondholders as to what would happen under various circumstances.” Included in the promises were how the city would calculate the amount of the SSA taxes to be levied on individual property owners and how the city would respond when property owners do not pay the SSA taxes.

The SSA funds contain a reserve account that can be used when funds to pay the debt service are scarce. However, city bond ordinances state the use of the reserve funds are a last resort measure, according to city documents.

“We have sought a written opinion from the city attorney and bond underwriter as to our inability to use reserve funds at this time; verbally, they have confirmed that we must proceed with the abatement ordinances as drafted this year,” a city report stated.

Before those funds can be tapped, the agreement calls for a mandatory increase in property taxes to all parties within the subdivision. When the SSAs were created, there was a maximum yearly levy amount established for each lot ranging from $2,000 to $2,400 depending on the subdivision. The maximum levy amount was calculated to ensure the debt service is paid.

According to documents, the 236 homeowners in Raintree Village SSA unit 1, the 36 homeowners in Raintree Village Unit 2, and the 80 homeowners in Windett Ridge are at their maximum levy. The residents of Grande Reserve central will be levied a $1,962 SSA property tax, which is still $366 below the maximum SSA property tax of $2,328, which means they could see an additional tax hike.

However, the developers of the three subdivisions, Morgan Stanley Bank’s LLC holding company in Raintree Village, Windett Ridge LLC in Windett Ridge, and US Bank’s LLC holding company in Grande Reserve, failed to make the property tax payments this year. City officials sought to sell off the property taxes, but there were no takers. When property taxes on developments are not paid they are expected to roll over annually, which creates a gap in funding.

Officials will discuss possible increase of property taxes in the subdivisions until the delinquent property taxes are caught up, as well as possible litigation against the delinquent developers.

The meeting begins at 7 p.m. at city hall.