WORKING WITH A TIF FROM A SCHOOL DISTRICT PERSPECTIVE

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WORKING WITH A TIF FROMA SCHOOL DISTRICT
PERSPECTIVE

• ITIA 2007 SPRING CONFERENCE
  AL HUMPAGE HOLIDAY INN CITY
  CENTER WALTER J.
  ZUKOWSKI
• PEORIA, ILLINOIS
  ZUKOWSKI LAW OFFICES
• APRIL 26, 2007
  PERU, ILLINOIS

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IMPORTANCE OF PROPERTY WEALTH
ILLUSTRATION
1 SCHOOL DISTRICT A AND B WOULD BOTH LIKE
TO GENERATE 1,000,000 IN LOCAL TAX REVENUE
WEALTH
TAX RATE
DISTRICT A 50 Mil
2.00
DISTRICT B 25 Mil
4.00
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IMPORTANCE OF PROPERTY WEALTH
ILLUSTRATION
2 SCHOOL DISTRICT A AND B WOULD BOTH LIKE
TO GENERATE 1,100,000 IN LOCAL TAX REVENUE
WEALTH
TAX RATE
DISTRICT A 55 Mil
2.00
DISTRICT B 25 Mil
4.40
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PARTIAL REIMBURSEMENT FOR SCHOOLS
1. STATE AID REIMBURSEMENT -
FORMULA ESTABLISHED FOR
FOUNDATION LEVEL SCHOOLS
A. HIGH SCHOOL.1.05
B. ELEM SCHOOL....2.30
C. UNIT SCHOOL..3.00
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PARTIAL REIMBURSEMENT FOR SCHOOLS
2. FOUNDATION LEVEL ELEMENTARY SCHOOL
HYPOTHETICAL FINANCIAL RECOUPMENT
AGREEMENT
AMOUNT OF EAV PLACE IN TIF 25,000,000
SCHOOL DISTRICT TAX RATE 3.20
WITHOUT TIF ADDITIONAL EXTENSION WOULD BE
.0330 x 25,000,000 800,000
WITH TIF STATE AID REIMBURSEMENT
.0230 x 25,000,000 575,000
SCHOOL LOSS LOCALLY IS - 225,000
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PARTIAL REIMBURSEMENT FOR SCHOOLS
- NEED INTERGOVERNMENTAL AGREEMENT FOR
225,000
- STATE AID WILL COME ONE YR LATER
- HOLD HARMLESS DISTRICTS OR FLAT GRANT
DISTRICTS WILL NOT RECEIVE STATE AID
REIMBURSEMENT.
- ALTERNATE FORMULA DISTRICTS WILL RECEIVE A
SMALL PERCENTAGE BASED ON A SLIDING SCALE.
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IMPACT FROM RESIDENTIAL TIF
1. FROM ACTUAL TAX BILL
TAXABLE VALUE 34,620 BREAKDOWN OF
TAXABLE VALUE 1,388
BASE VALUE (LOT)
33,232 TIF VALUE (HOME VALUE)
34,620 TAXABLE VALUE
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IMPACT FROM RESIDENTIAL TIF

TAX RATE TAX AMT County .7415
1.03 TWP .1455 .20 TWP
Rd .3679
.51 HS 2.7622 3.84 GS
2.1676 3.01 CC
.3795 .53 City
1.2811 1.78
Library .2057 .29
GS Bond .2366 .33
TIF IV .0000 2857.66
8.2876 2869.18

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IMPACT FROM RESIDENTIAL TIF
TAX BILL 2,857.66 For The TIF 11.52
For Taxing Bodies 6.85 For HS and GS
STATE AVERAGE OPERATING EXPENSE PER PUPIL
WAS 7,145
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WHAT CITIES CAN DO TO HELP SCHOOLS
A. BE CONSERVATIVE
1. LIMIT THE SIZE OF AREA
2. END TIF AS SOON AS POSSIBLE
3. LIMIT NUMBER OF TIFS
4. ABIDE BY BUT FOR LANGUAGE
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WHAT CITIES CAN DO TO HELP SCHOOLS
A. BE CONSERVATIVE (CONT)
5. DONT BE AGGRESSIVE - EXAMPLE A
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WHAT CITIES CAN DO TO HELP SCHOOLS
A. BE CONSERVATIVE (CONT)
5. DONT BE AGGRESSIVE - EXAMPLE B
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WHAT CITIES CAN DO TO HELP SCHOOLS
A. BE CONSERVATIVE (CONT)
6. NO MIGRATION OF BUSINESSES
7. VALIDATE DEVELOPER
8. NO RESIDENTIAL SUBDIVISIONS
9. DELAY CAPTURE OF INCREASED EAV
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WHAT CITIES CAN DO TO HELP SCHOOLS
B. HELP SCHOOLS TO RECOUP LOCAL REVENUE LOSS
1. ESTABLISH INTERGOVERNMENTAL AGREEMENT
-- COSTS OF REHABILITATION, RECONSTRUCTION OR
REPAIR OR REMODELLING OF EXISTING PUBLIC OR
PRIVATE BUILDINGS
-- COSTS OF THE CONSTRUCTION OF PUBLIC WORKS OR
IMPROVEMENTS
-- ALL OR A PORTION OF A TAXING DISTRICTS
CAPITAL COSTS RESULTING FROM THE REDEVELOPMENT
PROJECT
Tax Increment Allocation Development Act
65 ILCS 5/11-74.4 et. seq.
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WHAT CITIES CAN DO TO HELP SCHOOLS
C. ESTABLISH FEES TO OFFSET COSTS TO SCHOOLS
1. LAND ACQUISITION AND SITE PREPARATION
2. FACILITY CONSTRUCTION OR EXPANSION
3. COST OF EDUCATION
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C. ESTABLISH FEES TO OFFSET COSTS TO SCHOOLS
(CONT)
TOTAL FEES
Fee 4-Bd
Home 2-Bd Apt
Transition
8,191 1,266
Impact
3,305 505
Capital
9,814 1,509

21,310 3,280
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C. ESTABLISH FEES TO OFFSET COSTS TO SCHOOLS
(CONT)
COMPARISON OF MUNICIPALIES
4 BEDROOM HOME
Plainfield 12,229.25 Sugar Grove 12,080.20 Osw
ego 11,991.05 Elgin 11,391.89 Lake in Hills
11,234.50 Sycamore 10,573.20 DeKalb 10,258.
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Huntley 9,150.00 Algonguin
8,895.28 Plano 7,930.35 Shorewood
7,768.69 Wauconda 7,076.42 Yorkville
7,035.41 Channahon 6,986.50
Updated July 2006
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WHAT CITIES CAN DO TO HELP SCHOOLS
D. COST OF EDUCATION
-- SALES TAX
-- ETC. (EG., GAS, LEASE, PILLOW)
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IS THE SUCCESS OF MY COMMUNITY TIED TO THE
SUCCESS OF OUR PUBLIC SCHOOLS?
Knowledge Works Foundation 2004 Poll
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RENOVATION AND CONSTRUCTION OF NEW SCHOOLS HAD A
MAJOR IMPACT ON HOUSE PRICES. WITH SUCH A
POWERFUL DRAW, IT IS NOT SURPRISING THAT
THE FOR-PROFIT REAL ESTATE AND HOME BUILDING
SECTORS USE PUBLIC SCHOOLS AS MARKETING TOOLS.
Using Public Schools As Community-Development
Tools October 2002
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EACH COMMUNITY WILL NEED TO MAKE A
POLICY DECISION ABOUT WHETHER THE COST IS
CHARGED DIRECTLY TO THE NEW RESIDENTS OR SHARED,
VIA HIGHER TAXES, AMONG ALL CURRENT RESIDENTS.
Carrion and Libby, Development Impact Fees, A
Primer 2001 Ohio State University
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Thank You!
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IMPACT OF FOUR KEY GROUPS
CITY
DEVELOPERS
TIF ADMINISTRATORS
TAXING BODIES (PUBLIC SCHOOL DISTRICT)