cover
TO: Mayor Richard C. Irvin
FROM: Christopher Minick, Chief Financial Officer/City Treasurer
DATE: October 5, 2021
SUBJECT:
An Ordinance notifying all taxing bodies of the closure of Aurora Downtown Tax Increment Financing (TIF) District #1.
PURPOSE:
In order to close a TIF, the City must notify the taxing bodies in which the TIF is located of the intent to close the District. TIFs can be closed prior to their statutory end date and the procedure for closing a TIF early or at the end of life is the same. This notification provides all taxing bodies early information on the potential new tax base that will be accessible for their respective 2022 tax levies.
BACKGROUND:
TIF #1, as noted by the number is the first TIF to be created by the City. This TIF covers the downtown north of Benton, and a map of the District is attached. As noted in the ordinance, this TIF has been extended by 12 years from the original duration and has also been amended several times recently during the creation process for the Micro TIFs beginning in FY 2019 as noted below
Stolp Island TIF #9 - Keystone Project
Galena Broadway TIF #10 - Terminal Project
River Benton TIF #11 - 80 S. River Project
River Galena TIF #13 - Hobbs Project
DISCUSSION:
Each year the City files both an independent audit and a state certification report for each TIF district. These reports include information regarding the projects, expenses, debt and tax increment associated with the district. TIF#1 started in 1986 with an assessed value of $5.71 million and as of December 31, 2020 had an assessed value of $23.91 million, a growth of $18.2 million or 319% over the life of the district.
The tax increment for 2021 was $1.764 million and if this tax increment remained the same, this is the amount of new tax revenue available to all taxing bodies for the 2023 fiscal year. Attached is a sample breakdown of the relative portion of each taxing district, and the amount in new taxes they can receive, without any negative impact on taxpayers throughout the City. The City of Aurora, unlike other non-home rule entities, levies a dollar amount, and is not subject to a rate cap on the tax levy. In order for the City to take advantage of the growth in the tax base from the TIF closure, the 2021 tax levy would need to be increased by approximately $347,000, again, without a negative impact to any taxpayers. This increase is helpful to all taxing bodies in that many operating costs have increased substantially as a result of the COVID 19 pandemic.
IMPACT STATEMENT:
The closure of TIF #1 will provide an increasing tax base to all taxing bodies in the City of Aurora and has the potential to provide increased tax revenues based on each districts' levy.
RECOMMENDATIONS:
That this ordinance be adopted as presented.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
title
An Ordinance Terminating the Designation of the Aurora Downtown Tax Increment Financing Redevelopment Project Area and Dissolving the Aurora Downtown Special Tax Increment Allocation Fund.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City, pursuant to Ordinance Numbers O86-5596, O86-5597 and O86-5598, adopted December 2, 1986, Ordinance Numbers O03-146, O03-147 and O03-148, adopted November 4, 2003, Ordinance Numbers O09-37, O09-38 and O09-39, adopted May 26, 2009, Ordinance Number O19-005, adopted February 26, 2019, Ordinance Number O19-070, adopted October 22, 2019, and Ordinance Number O20-066, adopted October 13, 2020, established and amended the City’s Downtown Tax Increment Financing District No. 1 (“TIF District”) relative to the redevelopment project area, legally described, as amended, in EXHIBIT A attached hereto and made part hereof (as amended, the “Redevelopment Project Area”), approved a redevelopment project and plan, as amended, in relation to the TIF District (“Redevelopment Plan”) and adopted tax increment financing for the TIF District; and
WHEREAS, pursuant to 65 ILCS 5/11-74.4-8, the City intends to dissolve the special tax allocation fund for the TIF District (“TIF District Special Tax Allocation Fund”), terminate the designation of the TIF District redevelopment project area, and terminate the use of tax increment financing for the TIF District redevelopment project area effective December 31, 2022;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows:
SECTION 1: That, effective December 31, 2022, the City hereby terminates the TIF District Redevelopment Project Area.
SECTION 2: That the City hereby dissolves the TIF District Special Tax Allocation Fund, into which the incremental real estate taxes for the TIF District redevelopment project area have been paid, after receipt of the 2021 real estate tax increment paid in 2022, effective December 31, 2022. With the exception of up to $200,000, designated in escrow for the payment of tax appeals for tax years 2021 and prior, Any monies remaining in the TIF District Special Tax Allocation Fund at its dissolution are hereby designated surplus, and shall be paid to the Kane County Treasurer as the ex officio Kane County Collector ("County Collector") for payment to the taxing districts impacted by the TIF District redevelopment project area, in the same manner and proportion as the most recent distribution by the Kane County Collector (Treasurer) to those taxing districts of real property taxes from real property in the TIF District redevelopment project area, all in accordance with 65 ILCS 5/11-74.4-8.
SECTION 3: That in the event that additional incremental real estate taxes attributable to the TIF District redevelopment project area shall be received by the City from late payment of real estate taxes or any other reason, after the dissolution of the TIF District Special Tax Allocation Fund, such monies shall be segregated by the City, declared surplus funds, and sent to the Kane County Collector (Treasurer) for distribution in the same manner as provided for in Section 2, above.
SECTION 4: That after the termination of the TIF District redevelopment project area, the rates of the taxing districts shall be extended and taxes levied, collected and distributed in the manner applicable in the absence of the adoption of tax increment financing.
SECTION 5: That, pursuant to 65 ILCS 5/11-74.4-8, a certified copy of this Ordinance shall be forwarded, by the City Clerk, to each taxing district impacted by the TIF District, and certified copies of this Ordinance shall also be forwarded, by the City Clerk, to the Kane County Clerk, and to the Kane County Collector (Treasurer), all prior to November 1, 2021.
SECTION 6: That if any section, paragraph, clause or provision of this Ordinance shall be held invalid, the invalidity thereof shall not affect the other provisions of this Ordinance.
SECTION 7: That all ordinances in conflict herewith are hereby repealed to the extent of such conflict.
SECTION 8: That this Ordinance shall be in full force and effect from and after its passage, approval and publication in pamphlet form as provided by law.