City Of Dekalb issued the following announcement on Jan. 27.
DeKalb area taxing bodies are now operating under a series of TIF reforms – including an end to transfers by the City for administrative costs.
Most of the reforms had already been implemented with the creation of DeKalb’s new Tax Increment Financing District (TIF #3) last year, but Friday was the first quarterly meeting of the Joint Review Board (JRB) since all nine DeKalb area taxing bodies formally approved an intergovernmental agreement adopting the reforms. The JRB is made up of representatives of the taxing bodies and provides oversight for the TIF program.
As part of the agreement, the City is waiving any ability given by state law to be reimbursed for administrative costs with TIF funds. This reform was prompted by an audit supported by the City which found that $6,487,198 in TIF funds had been used for administrative costs from 2009 through 2018.
“This has been a very good process to fix a situation that wasn’t so good. That took a lot of effort and a lot of people to get to this point,” said JRB member and Kishwaukee College Board of Trustees Chairperson Bob Johnson on Friday. “It was the best outcome that could, in my opinion, have been expected.”
The taxing bodies will be made whole through the surplussing of annual TIF increment from TIF #3. Beginning in 2022, 30 percent of the revenue collected by the new TIF will be declared surplus and distributed to the taxing bodies. That amount increases to 50 percent in 2026.
“The point of that surplus is to gradually redeem the monies that had been taken from TIF funds and put into the General Fund for administrative purposes in the period from 2009 through 2018.,” said City Manager Bill Nicklas.
Also, under the agreement:
• The Joint Review Board will continue to meet quarterly to review the TIF program and financial data.
• Half of the revenues collected by TIF #1 will continue to be distributed to the taxing bodies for 2020 and 2021.
• An annual sales tax surplus from TIF #1 will be shared by all taxing bodies.
• An attorney will be hired to review the annual TIF reports, and that attorney cannot be the City attorney.
• The City will reimburse the DeKalb School District for its costs in helping to draft the intergovernmental agreement.
• The taxing bodies release the city from any claims related to the findings of the audit for the period of 2009-2018.
The next meeting of the Joint Review Board is April 23.
Map: DeKalb’s new Downtown TIF (TIF #3) is one-tenth the size of the City’s older Central Area TIF District, which expires at the end of 2021.
Original source can be found here.
Source: City Of Dekalb
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