After months of drafting city TIF agreement, DeKalb District 428 school board votes it down

DeKALB – Local school and government officials said they were surprised at DeKalb school officials voting against an intergovernmental tax increment financing agreement for a new city TIF district – and it’s still unclear why they voted the way they did.

Griff Powell, one of the interim superintendents for DeKalb School District 428, who was not tuned in for the school board’s virtual Tuesday meeting, said Wednesday he was not expecting to hear about that action coming from the school board. He said he was investigating the reasons why and had requested the agreement to be discussed not only during closed session for the next school board meeting scheduled for 9 a.m. Monday, but to vote on the agreement again coming out of executive session.

“Right now, I don’t have the answers as to what their reasons were,” Powell said Wednesday afternoon.

According to the 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 had 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.

School board president Sarah Moses, vice president Valerie Pena-Hernandez and board members Victoria Newport and David Seymour voted no during the Tuesday meeting, while board members Samantha McDavid, Jeff Hallgren and Jeromy Olson voted yes.

There was no discussion amongst school board members opposing the agreement during the Nov. 17 and Tuesday meetings ahead of the Tuesday vote.

Moses said Wednesday school officials are set to go back into closed session to further discuss the agreement with attorneys. At this point, she said, it’s in the hands of attorneys.

“After that, we could probably speak more to the circumstances,” Moses said.

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.

“I feel that the City of DeKalb is trying to make improvements on the process and I appreciate that,” McDavid said Wednesday.

Powell said he wanted to revisit the agreement and whatever concerns school board members may have sooner rather than later. He said he didn’t want to wait until January after months of deliberating over the draft agreement.

Powell said the assumption was that the school board was going to pass the agreement and he was personally miffed about school board members not providing reasons for their no votes.

“These are the things that should be aired out in public,” Powell said.

The update comes after the DeKalb City Council voted, 7-0, to approve the TIF agreement during their Monday meeting. Seventh Ward Alderman Anthony Faivre was absent from the meeting.

The City Council previously 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 City Manager Bill Nicklas said the governing boards for DeKalb County, the DeKalb County Forest Preserve District, the Kishwaukee Water Reclamation District, the DeKalb Public Library, Kishwaukee College, DeKalb Township and DeKalb Township Road and Bridge District have approved the agreement thus far, with the DeKalb Park District Board of Commissioners still having to vote on it. He said this process isn’t something that the city could just start all over again.

“We want to move forward with this,” Nicklas said. “I want to learn more about their concerns.”