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Plan compromise on Montgomery TIF district : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
Plan compromise on Montgomery TIF district
Options include tax rebates to fire district, letting businesses opt out of TIF area

by John Etheredge

12/12/2013

Montgomery Village Board members voiced unanimous support Monday evening for a plan to accommodate the Montgomery and Countryside Fire Protection District in anticipation the village board will create a Tax Increment Financing (TIF) district on the village's west side next month.

Referring to the plan, Fire District Chief Tom Meyers told the board, "I like what I'm hearing" and pledged to present it to the fire district board for their consideration during their next meeting on Monday, Dec. 16.

Meyers, however, once again expressed strong reservations over the potential negative impact the TIF district could have on the fire district's budget.

As proposed by village officials, the TIF district would encompasses approximately 776 acres of mostly undeveloped property adjoining Orchard and Aucutt roads on the village's west side.

Village officials have proposed the TIF district in an effort to help spur commercial and light industrial development in the area, attract jobs to the village and broaden the local tax base. As envisioned by village officials, businesses and developers would use TIF district revenues to pay for needed public improvements in the area, including bridges and flood control measures.

If the board approves the TIF district, the amount of property taxes the fire district and the other taxing districts that serve the area will receive will be frozen at their current level for up to the next 23 years.

However, the additional amount in property taxes the property owners will pay as the value of their properties increase in value will be placed in a separate TIF district fund to be managed by the village. The TIF district funds would, in turn, be used to pay for public improvements in the TIF district area.

But Meyers described the TIF district as posing a "huge, huge detriment" to the fire district's operations.

Meyers noted that the total equalized assessed value (EAV) of all properties in the fire district has dropped significantly since the 2008 recession, causing a significant loss of revenues.

"We've lost $72 million in assessed value since 2008. Our assessed value was $200 million. Today it is $128 million. Because our tax rate is maxed out it amounts to roughly $245,000 in lost revenue. Cash. So, when you're looking at a $1.2 million budget, that's a lot of money," he said.

Meyers said the fire district needs to at least see its EAV rise to its pre-recession level before the village puts a TIF in place and freezes the amount of tax revenue it will receive for the 23 year life of the TIF.

"This affects us for 23 years and it's about public safety money. I'm sorry. I wouldn't be here if I didn't think for one minute we weren't going to lose any money," he said.

Meyers concluded, "I've worked well with the village in years past and I will continue to work with the village. I always have and I'm committed to that, but I hope you guys can understand our position at the fire district. It is truly a concern for us. I never thought in all my years as a fire chief I would have to be protecting our tax money from another taxing body."



Board members discuss
options for fire district


Village Administrator Jeff Zoephel presented the board a memorandum outlining three potential options the board could take concerning the fire district's concerns.

Zoephel noted the board had already rejected the first option, which is to do nothing. The second option, he said, would keep all of the properties in the proposed TIF districts-including existing businesses-and continue to distribute the additional tax revenues from those businesses to the fire district and the other taxing districts behind the frozen or base level EAV "for a period of time."

Such a scenario would allow the fire district to recapture at least a portion of the EAV it has lost since 2008, according to Zoephel.

The third option, he continued, would be to remove some of the properties from the TIF district "allowing any EAV increases on those properties to go directly to other taxing bodies throughout the life of the TIF."

He said some business owners have asked that their properties be excluded from the TIF district.

Zoephel wrote in his memorandum that "parcels to consider removing include the Orchard Road Business Park parcels along Cornell (Avenue), Trio Foundry and R.J. Keck. This would remove 15 out of 87 parcels (in the TIF district) or approximately 17.25 percent of the parcels. These parcels make up approximately nine percent of the EAV."

Village President Matt Brolley told Meyers the board is considering options two and three.

Brolley explained the board could adopt a resolution calling for the village to rebate any future growth in the fire district's EAV for the life of the TIF district to the fire district "unless a future board decides not to."

"Honestly that's as far as I feel comfortable going with this," Brolley said, adding, "I don't feel it is our responsibility or our authority to tell a future board what they have to do. Our attorney has said that might not stand up in court."

By seeking to establish the TIF district, Brolley said the village is attempting to do "something proactive" to help existing businesses in the area.

As a result, Brolley said he believes that businesses located in the proposed TIF district area that do not want to be included should send letters to the village stating their desire to be excluded.

Board member Stan Bond expressed concern that the TIF district proposal has "not been fully vetted" to the potentially affected business owners.

Bond noted that existing businesses or businesses seeking to sell to firms seeking to expand would have access to TIF funds if the TIF district is approved.

"They will have access to assistance that they will not have if they opt out of the TIF district," he said.

Steve Andersson, village attorney, told the board that he has talked to numerous business owners in TIF districts over the years "and never heard a business person object to being in a TIF. They look at it as generally positive."

Referring to the existing businesses that have expressed a desire to be excluded from the TIF, Bond said, "There seems to be a presumption that we're trying to do something to them as opposed to something for them. I can understand that instinctive response, but I sure would like to be satisfied that what we are trying to do for them is clear."

Zoephel told Bond that he and Jerad Chipman, the village's senior planner, met personally with all of the business owners who have expressed a desire to be excluded from the TIF district.

Zoephel said he believes the village should exclude those businesses from the TIF district that have asked to opt out.

"I tend to agree with that philosophy that if they want out-all they have to do is say so," said board member Doug Maresek.




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