St. Charles Council Debates Property Tax Hike Amid Rising Costs

Introduction

The St. Charles Government Operations Committee convened on November 1, 2021 to address several key agenda items, including police pension representation, insurance renewals, and property tax levies. While routine approvals were made, the meeting centered on a heated discussion regarding a proposed 4.99% property tax increase to cover rising costs, debt obligations, and long-overdue infrastructure investments.

Key Decisions Made

Approval of Engagement Letter for Police Pension Representation

At the start of the meeting, the committee approved a letter of engagement with Clark Hill to represent the city in a police pension application matter. The change reflected a move by the city’s legal counsel to a new firm, with no adjustments to costs or hourly rates.

Risk Insurance Program Renewal Approved

The committee authorized the renewal of the Risk Insurance Program at a total cost of $845,794, reflecting a $121,000 increase from the previous year. The Assistant Finance Director explained that the increase was largely due to a surge in property insurance rates tied to the rise in natural disasters. Coverage will continue with IPRF, Travelers, and Chubb, ensuring robust earthquake and flood protection.

Approval of Special Service Area (SSA) Property Tax Levies

Nine Special Service Areas (SSAs) will maintain their existing tax levies for FY 2021 to fund localized services, such as parking upkeep and stormwater management.

Key Discussion: 2021 General Property Tax Levy Proposal

Background on the Proposed Increase

The Finance Department presented a 4.99% property tax increase proposal, which would add approximately $40.94 annually for a home valued at $300,000. Officials stressed this increase is necessary to fund:

• Rising insurance costs

• Debt service obligations

• Long-deferred capital replacement programs, such as police and fire department equipment

For over a decade, the city has maintained a flat tax levy despite fluctuating property values, leading to foregone revenue and accumulated financial pressure.

Aldermen’s Concerns and Requests for Clarity

Some aldermen supported the increase as a necessary step to avoid service cuts and maintain financial stability. Others called for:

• More transparency on potential service cuts if the levy is not increased

• A full financial overview, including pension obligations and reserves

• Consideration of other revenue sources before raising taxes

Decision to Delay the Vote

Rather than voting on the proposal, the committee opted to schedule a special meeting on November 8, 2021, to continue deliberations. Staff will prepare a detailed financial analysis and distribute materials earlier to aid council members’ decision-making.

Meeting Timeline

• 0:00 – 0:56: Roll call and announcements

• 0:56 – 2:22: Approval of police pension representation

• 2:22 – 8:04: Approval of risk insurance program renewal

• 8:04 – 10:17: SSA tax levy approvals

• 10:17 – 1:03:00: Debate over general property tax levy increase

• 1:03:00 – 1:08:40: Decision to delay levy vote

• 1:08:40 – 1:09:50: Meeting adjournment

Conclusion

The November 1, 2021, St. Charles Government Operations Committee meeting was marked by critical financial discussions. While routine matters, such as insurance renewal and SSA levies, were swiftly approved, the proposed 4.99% property tax increase became the central focus. The decision to delay the vote signals the council’s intent to weigh community needs against fiscal realities, with more data to come before a final decision is made.