SYCAMORE – The DeKalb County Board voted to approve an intergovernmental agreement for tax increment financing, or TIF, districts within the city of DeKalb during their meeting this week.
DeKalb County Administrator Gary Hanson previously said the new annual surplus for the district known as TIF 3 district is declared to start in 2022 and benefiting taxing districts would receive 30% of those funds and it would increase to 50% in 2026. He had said he believes the agreement would potentially give $13 million total over the TIF’s lifetime of about 20 years to all of the taxing bodies, with the county getting 10% of those funds.
“Those go to the general fund,” DeKalb County Administrator Gary Hanson said during the Wednesday meeting.
There was no additional discussion among board members before they voted, 22-2, to approve the agreement during the virtual County Board meeting on Wednesday. County Board members Craig Roman and Jeff Whelan were the only two members who voted against the measure.
Whelan said on Thursday that his reasoning for his “no” vote was that, per the agreement, there was only a percentage of revenue from the TIF district as opposed to a more tangible amount. He said it could be hundreds to thousands to millions that the county could receive over the lifespan of the district and he felt that the county isn’t getting the right amount of money in the agreement.
“We don’t know what we’re actually going to get,” Whelan said. “There’s no particular amount set up.”
Whelan said he personally has never been in favor of TIF district funds, either. He said those funds are meant to be used for blighted buildings or areas and that he didn’t approve of the way the city has been using them.
Whelan also said that, because of the COVID-19 pandemic, the budget for the county is down close to $1 million.
“Anything we can get from those TIF funds would help us make that budget,” Whelan said.
Roman said on Thursday that he not only doesn’t agree with the use of TIF districts in general, but he didn’t agree with how the city handled those funds in the past and he personally couldn’t vote in favor of the agreement because he didn’t believe that the city was admitting any past wrongdoing.
“We had to wait 13 years to get our money that they took, presumably, through the TIF district,” Roman said.
Roman said his vote was more of a symbolic “no” vote against the city. He said he believed the school board should ultimately make that decision to approve it, since the agreement affects them the most.
“If they were agreeable to that, I’m glad it passed,” Roman said.
The vote comes after the DeKalb County executive committee voted, 9-0, on Nov. 12 to approve sending the agreement to the County Board for a final vote.
The DeKalb City Council previously approved the TIF 3 district and voted to close the TIF 1 district early – in 2021 instead of 2022 – after the city’s Joint Review Board recommended doing so. Terminating TIF 1 a year early allowed taxing bodies to collect as much funding from surplus in one year as they would over 16 or more years of TIF 3 increment, according to city documents.
DeKalb School District 428 officials previously raised concerns about administrative fees being incorrectly charged on various TIF projects and that amount ranged from $500,000 to $800,000 a year from 2008 to 2018. An audit of the City of DeKalb’s tax increment finance spending since 2008 found the city used $7.9 million in TIF funds to offset salary costs, lacked consistent and complete record-keeping for TIF spending, and was including sales tax revenue in the TIF surplus to grow the increment.
Hanson had said the city previously admitted to about $11 million in misappropriated funds in 2018. He had said he thinks the agreement is going to generate sufficient monies to make the county whole, with the potential of being better than what TIF funds were misdirected over several years by the city.
The taxing bodies involved in the intergovernmental agreement include the City of DeKalb, DeKalb County, DeKalb School District 428, DeKalb Township, DeKalb Township Road and Bridge District, DeKalb Park District, the DeKalb County Forest Preserve District, Kishwaukee College, DeKalb Public Library and the Kishwaukee Water Reclamation District.
Hanson had said the rest of the taxing bodies involved in the agreement are voting on the agreement as their meetings are scheduled for the next month or so.
DeKalb County Board Vice-Chairman John Frieders had said a lot of work from the county and school district especially went into the agreement and it would be a shame to start over at this point. He had said he doesn’t believe anyone will ever get to the point where everyone is 100% in favor of the agreement.
“I think this is a situation where the majority of the people are somewhat satisfied and I think that it’s the kind of thing that we need to move forward and accept this and be happy that we … have safeguards in the agreement that this kind of thing doesn’t happen in the future,” Frieders had said. “I think we have a good working agreement now with the city and good working relationship and that it’s time to move on.”
Source: The Daily Chronicle