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Local

DeKalb city TIF intergovernmental agreement up for County Board vote

The DeKalb County Legislative Center Oct. 28, 2020.
The DeKalb County Legislative Center Oct. 28, 2020.

SYCAMORE – An intergovernmental agreement for tax increment financing, or TIF, districts within the city of DeKalb is set to go before a DeKalb County Board vote next week.

DeKalb County Administrator Gary Hanson said on Thursday the new annual surplus for the district know 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 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.

“This is a real key component of the IGA," Hanson said. "This is what is going to generate sufficient monies to, I think, make us whole, with the potential of being better than what monies were misdirected over the last many years by the city.“

The DeKalb County executive committee voted, 9-0, on Thursday to approve sending the agreement to the County Board for a final vote during the board's meeting scheduled for 7 p.m. Wednesday via Zoom. All members were present for the Thursday meeting.

The vote comes after the DeKalb City Council 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 said the city previously admitted to about $11 million in misappropriated funds in 2018.

"So I think we will be above that" in the proposed agreement, Hanson said.

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 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 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 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 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.”

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