LEGAL AUTHORITY EXISTS (Prepared by Jacob & Klein, Ltd.)
- REIMBURSE CAPITAL COSTS: Section 5/11-74.4-3(q) of the TIF Act defines “redevelopment project costs” to mean and include the sum total of all reasonable or necessary costs incurred or estimated to be incurred, and any such costs incidental to a redevelopment plan and a redevelopment project. Such costs include, without limitation, the following… Section 5/11-74.4-3(q)(7) states that “to the extent the municipality by written agreement accepts and approves the same, all or a portion of a taxing district’s capital costs resulting from the redevelopment project necessarily incurred or to be incurred within a taxing district in furtherance of the objectives of the redevelopment plan and project.”
- MAKE & ENTER INTO ALL CONTRACTS WITH OVERLAPPING TAXING DISTRICTS: Section 5/11-74.4-4(b) of the TIF Act provides authority to municipalities to enter into all contracts with property owners, developers, tenants, overlapping taxing bodies, and others necessary or incidental to the implementation and furtherance of its redevelopment plan and project.
- INTERGOVERNMENTAL COOPERATION ACT: The 1970 Illinois Constitution, Article VII, Section 10, and the Illinois Compiled Statutes, Ch. 5 Section 220/1 et. seq. provide legal authority for intergovernmental privileges and authority to be enjoyed jointly by school districts and municipalities as well as other public bodies politic.
- EXPENSES FOR ECONOMIC DEVELOPMENT ACT: Section 5/8-1-2.5 of the Municipal Code allows a municipality to appropriate and expend funds for economic development purposes, including, without limitation for commercial enterprises that are deemed necessary or desirable for the promotion of economic development within the community.
EIGHT (8) WAYS FOR A TIF DISTRICT TO COOPERATE
WITH OTHER TAXING BODIES (Prepared by Jacob & Klein, Ltd.)
Any of the following approaches should be structured with the assistance of legal counsel and may require one or more written Intergovernmental Agreements:
- Design TIF Redevelopment Plan with Cooperative Options: Incorporate a thoughtful impact analysis and anticipate some future assistance to other taxing bodies in the TIF Redevelopment Plan and Projects.
- Count New Students from TIF Projects: The TIF Act has a default method for assisting school districts by reimbursing a portion of TIF increment for a resulting “net increase” in student enrollment.
- Annual Capital Cost Reimbursement: It may be possible to design a method based on an annual flat percentage or formula amount to reimburse capital costs. Some capital cost reimbursements are “triggered” by certain events, such as the occurrence of new residential development.
- Periodic, Lump-Sum Reimbursement: Municipalities may agree to periodic reimbursement of TIF funds for specific capital projects, such as building improvements or repairs, purchase of equipment, or other capital expenditures.
- In-Kind Assistance: If located within the TIF District Redevelopment Project Area, municipality could repair or construct public infrastructure (e.g., roads, sidewalks, storm drains, etc.).
- Return TIF Increment per Bond Referendum Rate: Municipality could agree to return TIF increment derived from a tax rate resulting from a taxing body’s bond referendum. Taxing body should then adjust annual levy.
- Surplus Funds: Municipalities may declare TIF surplus funds if unobligated TIF funds exist or such surplus was anticipated when the TIF Redevelopment Plan was designed. Such TIF funds are returned to County Collector who then re-distributes the money to taxing bodies based on current real estate tax rates.
- Payment in Lieu of Taxes: Payment of estimated tax revenues from property in a TIF Area that that is derived from property acquired by the municipality which, per the TIF Plan, is to be used for private use. Such funds are paid to County Collector who then distributes the money to taxing bodies.