DeKALB – DeKalb Township Supervisor Jennifer Jeep-Johnson, who announced this week that she’s resigning from the position because she’s moving, said it’s unlikely the township will be pursuing litigation against the city of DeKalb for misused tax increment finance money.
Jeep-Johnson said it’s because the township’s share of the TIF pie would be less than what it woudl take to file a lawsuit.
“There’s no action for the township to take,” she said. “The township in general accounts for about 1% of your property taxes, so what we’ve been told, and everyone pretty much agrees, is that going to litigation over this could potentially be a three to five year process that could cost hundreds of thousands of dollars.”
Jeep-Johnson said the township would stand to collect about $70,000 of its share of the TIF funds that could have been surplussed to taxing bodies but, per an intergovernmental agreement and unclear TIF statutes at the state level, the city of DeKalb instead surplussed it to the state and a portion to itself.
The audit, released May 28, reviewed the city’s TIF spending since 2008 and shows the city used $7.9 million in TIF funds to offset salary costs. The audit also showed the city lacks consistent and complete record-keeping for TIF spending and was including sales tax revenue in the TIF surplus to grow the increment, which auditors say needs clarification as to whether that complies with Illinois’ TIF Act.
Per the 2007 intergovernmental agreement with neighboring taxing bodies such as the DeKalb County government, the DeKalb Park District and the DeKalb School District 428, surplus increment from the Central Business TIF known as TIF 1 was divided up among the taxing bodies. The audit shows the city included sales tax revenue in addition to property tax revenue in the surplus, increasing the sum and collecting more than they would have if they haven’t included sales tax revenue.
Jeep-Johnson said the recommendation from the DeKalb School District 428 board – that a new intergovernmental agreement be entered into for the TIF district known as TIF 3 to begin sharing new surplus – would more greatly benefit the school district because it receives more property tax revenue than the township by nature.
“We’ve spoken up as loudly as everyone else that past practices of TIF were unreasonable, they should have never happened,” she said. “We’ve admonished the city for their past practices but [the board] would never want to enter into a prolonged litigation that could cost more money than we could collect just to teach the city a lesson.”