Council is knee deep in TIF

Cathy Decker/Staff reporter

An informal opinion on voting on Tax Increment Financing issues came to the City of Aledo from the Illinois Attorney General's office - a topic that brought about much discussion at Tuesday's Sept. 2, 2008 Aledo City Council meeting.

The council had been told earlier this year by Aledo City Attorney Mark Walton that any council member owning property within the TIF district should not vote on or even voice their opinions on any TIF related topics. Several alderman asked for an attorney general opinion on the matter.

The matter was referred to Mercer County State's Attorney Gregory J. McHugh, who sent a letter asking for an opinion on conflict of interest and the TIF restrictions.

A four-page opinion was received on Aug. 11, 2008 by the Mercer County State's Attorney and forwarded to the city. "It typically takes about six months," City Attorney Walton told the council.

The opinion said in part: "the Code prohibits city council members who own property located in an existing redevelopment project area from voting on or taking any other official action in connection with matters concerning such plan, project or area, unless one of the provision's exceptions apply."


Tax Increment Financing (TIF) was introduced in Aledo in 1986. The TIF district encompasses the downtown area and along Rte. 17 going both east and west. A TIF was originally set up for 23 years, but was extended in 2005 for another 12 years by the city council until 2021.

The purpose of the Tax Increment Allocation Redevelopment Act is "to encourage private investment and restore and enhance the tax base of the taxing districts of blighted areas and conservation areas in the State of Illinois through the creation of tax increment financing districts. The act is designed to stimulate private investment into TIF districts through financial incentives for public improvement in the districts. Once a TIF district is created and public improvements made there, the incremental increases in tax revenues are designed to help finance the improvements made.

The particular section of the act states: "If any member of the corporate authority owns or controls an interest, direct or indirect, in any property included in any redevelopment area, or proposed redevelopment area, he or she shall disclose the same in writing to the clerk of the municipality, and shall also so disclose the dates and terms and conditions of any disposition of any such interest, which disclosures shall be acknowledged by the corporate authorities and entered upon the minute books of the corporate authority." It further states the individual who holds an interest shall refrain from any further official involvement in regard to such redevelopment plan, project or area, from voting on any matter pertaining to such redevelopment plan, project or area, or communicating with other members concerning corporate authorities, commission or employees concerning any matter pertaining to said redevelopment plan, project or area.

One exception applies to a single parcel of property owned by a member of the corporate authority that is used as the primary residence. That person must still disclose the property ownership, however is not restricted from voting on TIF issues.

Another amendment to the subsection of the TIF act was made, effective Jan. 1, 2007, that eliminates having in interest in property if the single property interest was acquired within one year of the Jan. 1, 2007 amendment, is used as the member's primary residence, is disclosed to the municipal clerk, is acquired for fair market value, that was publicly advertised for sale and the member refrains from voting on, and communicating with others concerning any matter, when the benefits to the redevelopment project or area would be significantly greater than the benefits to the municipality as a whole.

City alderman speak

One alderman said, "What the statute actually prohibits one might avoid by conveying the property to a relative."

Alderman Chris Hagloch, Ward 1, informed the council that he needed to resubmit his holdings to the city clerk. "It is my opinion that I need to remove myself as the TIF chairman," he said.

Mayor Lee Celske said he is in the process of trying to sell a certain parcel he owns, as well. "I am not going to do anything with TIF," said the mayor.

Rich Maynard said that what the council received was "an analysis, not an opinion."

"This is not an official opinion of the attorney general," said Alderman Rillie. He pointed to a footnote on the bottom of page four of the letter that states: "Unlike these two exceptions, both of which apply only to cases in which the 'property is used exclusively as the member's primary residence,' subsection 11-74.4-4(n) has been amended further still to exempt single parcels of property owned by a member which are being used as month-to-month leaseholds from the reach of the provision's restrictions as well, provided such property interests are disclosed to the municipal clerk."

He went on to point to his office, which he said is leased on a month to month basis. "Mine conforms to the TIF," he said.

Burelle added, "The Attorney General opinion is advisory. It is not law."

"If you don't believe (you are prohibited) you are free to do what you like," said Mayor Celske. "That's all I've got."

In other business the council:

• Received a request from Joe Vitale about using TIF money to help pay for resurfacing the parking lot at Vitale's Pizza at 602 SE 3rd St. He requested that the city repaves its portion next to the lot, which runs to the street (on 6th Ave.) and to help with his project. No action was taken.

• Referred a request about traffic and parking at Apollo Schools to the street committee, to be coordinated with the school.

• Learned that a meeting of the Joint Review Boards on Aug. 26 introduced the 2004-2005 and 2005-2006 TIF report that showed there was a deficit in each of those years in the TIF fund, by either spending, or committing money to projects for TIF. This means there is no money to be returned to the various taxing bodies from TIF. The city is completing the 2006-2007 TIF report in house. That report should be completed in mid October.

• Learned the code enforcement hearing process has had a 98.5 percent compliance rate, but there is one property owner not in compliance that the city is planning to seek a judgment against. The fines for that property have reached more than $50,000.

• Learned the public works department has installed 675 water meters and 560 gas meters throughout the city. The department is averaging installing 10-15 a day and should have the entire city completed within a year.

• Heard a request to allow placement of dumpsters for Dollar General and the Aledo Meat Market, which was put on hold.