Woodstock could raise sales tax to fund rec center renovation

A proposed sales tax increase in Woodstock would bring the city’s overall rate to 8.5%, which would tie Crystal Lake for the highest in McHenry County.

Woodstock officials are considering the tax hike to fund renovations at the city’s rec center.

The project is set to go to bid later in June, and officials estimate the price tag will be $9 million for renovating the existing space at 820 Lake Ave. and another $1.5 million to add a mezzanine.

A new building, by comparison, would cost $20 million, Parks and Recreation Director Mark Pentecost told the City Council last month. Woodstock does not have a separate park district.

Council members expressed support for a sales tax over a property tax to fund the renovations.

Woodstock officials are considering a bond sale for the rec center, and the sales tax increase would cover the repayment of the borrowing. Officials have set a preliminary figure of $6.2 million for bonds for the facility, but numbers won’t be final until the bids come back.

The city is looking to issue about $21 million in bonds to fund not just the rec center renovations but other capital programs, but the city’s portion of the Route 47 widening project wasn’t included in the proposal.

“The revenue derived from the proposed [sales tax] increase would fund the anticipated debt required by the Rec Center renovations and could provide additional support for other capital improvement projects,” City Manager Roscoe Stelford wrote in an email.

According to city documents, increasing the home rule sales tax would require the city to conduct a public hearing because of rules adopted when Woodstock became a home rule community almost a decade ago. The total sales tax on general merchandise in the city is 8.25%, including the 1% Woodstock home rule sales tax.

In May, Stelford suggested a 0.25% increase to the home rule sales tax, which could generate an estimated $800,000 to $850,000 in revenues each year.

The City Council also is going to take up whether to enact the 1% local grocery tax at a later meeting, Stelford said.

If the council goes with a 0.25% increase, Woodstock would tie Crystal Lake with the highest sales tax in the county at 8.5%, of which 1.25% is home rule sales tax. Crystal Lake also recently granted the Water’s Edge development an additional 1% sales tax for future retailers there, money that will cover eligible redevelopment costs.

Regarding Woodstock’s proposed sales tax increase, City Council member Gregg Hanson said he doesn’t want any carve-outs. He asked if the city could sunset the tax after 10 years.

Mayor Mike Turner expressed support for sunsetting the tax once the bonds are paid off. Woodstock usually issues bonds with a 20-year repayment schedule, Stelford said.

Although bids are about to be issued, the city faces a bit of a time crunch on the rec center project.

Woodstock received a nearly $2.8 million state grant last year for the rec center, but city officials said they have two years to complete the work and plan to ask for an extension.

The rec center will move operations to the Woodstock Assembly of God church building while renovations take place. The council has approved a lease with the church, effective July 1. But city hopes to have operations at the church up and running by August, according to city records. The lease runs until June 30, 2026, but the city has the opportunity to switch to a month-to-month plan at that point, according to city documents.

The city is expected to pay about $5,500 per month for rent and also has expenses expenses such as adding air conditioning to the gym and redoing some locker rooms that haven’t been used for some time, according to city records. Those improvements likely would not cost more than $60,000, according to city documents.

Council member Tom Nierman pointed out that, as the city is renting the facility, it won’t get back any money it puts into it.

He suggested using temporary AC or repainting the locker rooms. He said the city should make any changes with “a lot of value engineering, knowing ... it’s not a permanent place for us.”

A vote on issuing the bond, as well as the public hearing for the sales tax, is expected to take place July 15, according to city records.