DeKalb Park District approves city’s TIF intergovernmental agreement for new district

DeKALB – After years of talks, the City of DeKalb is within arm’s reach of establishing its newest tax increment financing district, now that all of the affected taxing bodies are on board with the TIF district’s intergovernmental agreement.

DeKalb City Manager Bill Nicklas said all taxing bodies have officially approved the agreement after the DeKalb Park District Board of Commissioners voted, 4-1, to approve the agreement during their Jan. 7 meeting. Along with the park district, that also includes governing boards and councils for DeKalb County, the DeKalb County Forest Preserve District, the City of DeKalb, the Kishwaukee Water Reclamation District, the DeKalb Public Library, Kishwaukee College, DeKalb Township and DeKalb Township Road and Bridge District.

“I’m pleased and also relieved,” Nicklas said. “I think for two years we’ve been at this.”

According to the intergovernmental agreement, the new annual surplus for the district known as TIF 3 is declared to start in 2022 and benefiting taxing districts would receive 30% of those funds and it would increase to 50% in 2026. DeKalb County Administrator Gary Hanson has 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.

Previously, the DeKalb School District 428 Board of Education voted on Dec. 21 to approve the agreement after the school board initially voted it down. Local school and government officials had said the week before the Dec. 21 meeting they were surprised at DeKalb school officials voting down the agreement, since the district’s legal counsel had been heavily involved in the creation of the agreement for the city TIF district.

There was no discussion during either school board meeting about individual vote rationale.

Griff Powell, one of the interim superintendents for DeKalb School District 428, said in December staff and legal counsel cleared up some misunderstandings and he was thrilled to see the vote change.

“I think a lot of hard work went into this on both sides to make that happen,” Powell said.

Powell declined additional comment about what exact misunderstandings or concerns there were about the agreement, saying it was discussed in closed session with legal counsel and could be subject to litigation.

School board president Sarah Moses, vice president Valerie Pena-Hernandez and board member Victoria Newport still voted no during the Dec. 21 meeting, while board members Samantha McDavid, Jeff Hallgren, Jeromy Olson and David Seymour voted yes. Seymour was the only board member whose vote changed between the Dec. 21 meeting and the Dec. 15 meeting and he was not immediately available for comment following the Dec. 21 meeting.

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.

Nicklas said the city’s TIF processes have conformed to what the TIF 3 agreement required and that came from productive conversation between the taxing bodies. He said the city also has stopped taking money out of TIF funds for any administrative purposes.

“There’s no more of that,” Nicklas said. “Whether it’s justified in state law or not, we’re not going to do that and we have agreed to that in the agreement.”

Park board commissioner Gail Krmenec was the lone “no” vote. She said after the Jan. 7 meeting she was happy that the Joint Review Board has addressed the issues that came from the audit, but she’s not comfortable with what the park district would get out of the agreement.

Krmenec said that, per the agreement, the park district would forego tax revenue for the life of TIF 3. That comes as the park district is looking at some big ticket capital projects, including $8 million to $10 million for Hopkins Pool upgrades and eventual updates to Haish Gym, which is about 100 years old.

“That’s a long time to forego revenue,” Krmenec said. " ... That affects the community for a very long time.”

The next Joint Review Board meeting is scheduled for Jan. 22.