DeKALB – Members of the DeKalb’s Finance Advisory Committee aren’t ruling out any options that could help pay for $33 million in street repairs the city will need in the next five years, even if it means raising sales or property taxes.
The citizen committee met Wednesday to talk about the problems the city could face when one tax increment financing district expires in 2018 and the other expires in 2020, which will eliminate the money the city uses to pay for street repairs. Committee members didn’t make recommendations to the DeKalb City Council, although they will after examining the issue in the coming months.
“I do like the idea of a sales tax for arterial roads and the like,” Chairman Mike Peddle said. “But the bottom line is a lot of these roads are residential streets. Here’s something where you may have to bite the bullet. If our residents want better streets, the thing that is most tied to the use of residential streets is residents. We may be looking at the property tax. I’m not advocating it, but that may be next.”
This year, the city will use $1 million in TIF funds to pay for street repairs, City Engineer John Laskowski said. TIF districts allow the city to divert property tax money into a special account that is used to rehabilitate blighted areas. Another $400,000 to be spent on street repairs will come from the local gas tax. The city dedicated another $100,000 to pay for sidewalks and alleys.
The Central Area TIF district, which covers downtown DeKalb and Sycamore Road, will get $500,000 in street repairs this year. It expires in 2020. A second TIF district that covers a portion of the city between Lincoln Highway and Taylor Street is responsible for $500,000 and expires in 2018.
Laskowski said city streets will need $33 million in repairs over the next five years, about $6.6 million a year. That money would pay to maintain streets at their current levels, with 45 percent in need of maintenance, 28 percent satisfactory and 27 percent failing.
Assistant City Manager Rudy Espiritu showed increasing DeKalb’s 1.75 percent sales tax by 1 percentage point would raise $4 million. Raising $6 million would require a 1.5 percentage point increase.
“I’m all ears for discussing tax increases, but it’s very difficult to absorb right now,” committee member Mike Verbic said.
Paying for street repairs is only one piece of a larger ongoing city discussion about the TIF districts’ looming expiration. As Espiritu noted Wednesday, the city uses about $1.4 million in TIF funds to support the general fund.
City leaders also have yet to determine how much money the areas included in the TIF districts will generate once they expire or how the property taxes will compare to the current stream of TIF revenue.