Title
SUPPLEMENTAL APPROPRIATION ORDINANCE OF THE CHICAGO PARK DISTRICT FOR ADDITIONAL 2023 REVENUES AND EXPENDITURES
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To the Honorable Board of Commissioners of the Chicago Park District
I. Recommendation
Pursuant to Ch. XII, Sect. C. 11, of the code of the Chicago Park District it is recommended that the Board of Commissioners approve the attached supplemental ordinance to allocate additional revenues from Corporate Fund Personal Property Replacement Tax (PPRT) to be divided among the Corporate Fund Supplemental Contribution to the Pension, the Corporate Fund principal retirement, The Corporate Fund Materials and Supplies and the Corporate Fund Contractual Services Account, and the Aquarium and Museum Operating Fund for 2023. This ordinance will result in a total increase of $52,500,000. The total 2023 operating appropriation, including this supplemental appropriation will increase 9.6% from $545,385,059 to $597,885,059.
II. Explanation
Personal Property Replacement Taxes (PPRT) are revenues collected by the State of Illinois and paid to local governments to replace money that was lost by local governments when their powers to impose personal property taxes on corporations, partnerships, and other business entities were taken away in the 1970 Constitution. In 1979, a law was enacted to provide for statewide taxes to replace the funds lost by local governments. PPRT was designed to provide a revenue source for local governments to meet pension obligations, pay outstanding debt and otherwise was an unrestricted source of funding for local government operations and services. By state statute, 7.354% of PPRT revenues must be distributed to the Aquarium and Museums that reside on Park District property.
In State Fiscal Year 2023 (7/1/2022-6/30/2023), the Illinois Department of Revenue distributed $4.32 billion in PPRT to 6,486 local governments throughout Illinois. The Chicago Park District receives approximately 3.3% of those distributions, of which $106,416,175 has been received thus far during the District’s Fiscal Year 2023, which is 1/1/2023-12/31/2023. In addition, another $14.2 million is originally forecasted to be received in the last two distributions. For the 2023 Annual Appropriation Ordinance, the District anticipated to receive $70,000,000. It is now recommended that the District divide the surplus PPRT revenue as follows:
• $13,500,000 appropriation in the Corporate Fund to the Supplemental Contribution to the Pension. The District has worked to reduce the outstanding liability in the Pension Fund and this additional funding would help reduce that liability and provide cash flow to the fund so pension assets are not liquidated to make benefit payments.
• $13,500,000 appropriation in the Corporate Fund to principal retirement. The District has bonds backed by PPRT revenues and other debt that is callable on January 1, 2024. These funds will be deposited in an escrow to defease these bonds.
• $21,000,000 to the Corporate Fund Contractual Services Account. This funding will help fund needed repairs and maintenance to District facilities and various capital improvements ($16.0 million) as well provide funding to offset the increased costs associated with additional large events at Soldier Field ($5.0 million).
• $500,000 to the Corporate Fund Materials and Supplies Account. This funding will provide for larger than expected costs in our building and maintenance supplies and janitorial supplies.
In addition, as a result of the increased distributions received from PPRT, the District needs to amend the appropriation to the Aquarium and Museum Operating Fund. The Aquarium and Museum Operating Fund receives 7.534% of all PPRT received by the Park District. For 2023, the Aquarium and Museum Purposes Fund was allocated to receive $5,273,800 from Personal Property Replacement Tax. Based on revenue received year to date and estimated revenue to be received from the remaining PPRT distributions, an additional approximately $4,000,000 in supplemental appropriations will be appropriated to the Aquarium and Museums in 2023, which represents a revised annual total of $9,273,800.
It is now recommended that the additional $4,000,000 for the Aquarium and Museum Fund, along with the $48,500,000 for the Pension Contribution, the Debt Service, Materials and Supplies and the Corporate Fund Contractual Services be reflected in the 2023 budget by adoption of this supplemental ordinance.
2023 SUPPLEMENTAL ORDINANCE SUMMARY
Revenues:
Personal Property Replacement Tax (PPRT) $52,500,000
Expenditures:
Supplemental Contribution to Pension Fund $13,500,000
Principal Retirement 13,500,000
Contractual Services 21,000,000
Materials and Supplies 500,000
Aquarium and Museums 4,000,000
Total Expenditures $52,500,000
Original Appropriation Supplemental Appropriation Total % Change
2023 Budget
Appropriation $545,385,059 $52,500,000 $597,885,059 9.6%
III. Budget and Financial Information
Budget Classification:
Corporate Fund Contractual Services
Corporate Fund Materials and Supplies
Pension Fund Supplemental Contribution
Aquarium and Museum Operating Fund
Corporate Fund Bond Principal Retirement (Debt Service)
Fiscal Year: 2023