The Downtown Neighborhood Association of Elgin is looking into funding its operations by establishing a new special service area downtown.
First, however, an existing downtown SSA that funds the maintenance of the Spring Street parking deck should be abolished, association officials say.
SSAs essentially are additional taxes imposed on property owners that go toward funding specific projects within that area.
The city's proposed 2014 budget includes $120,000 in Downtown Neighborhood Association funding from the city's tax-increment financing district revenues, which come from property taxes diverted from local governments. That funding would remain the same in 2015, but an SSA could be implemented starting in 2016, according to budget documents.
With an SSA, the downtown association would be funded directly by the property owners it advocates for, board President Karen Jones said. "It's more like a homeowners association type of system," she said. "It puts the organization and the ownership back in to the property owners' hands, rather than being funded through a municipal body."
Association board member Grace Richard agreed. She and others on the board are downtown property owners.
"The people who would run (the association) are the people who are paying for it," she said. "This wouldn't be a bunch of volunteers; this would be the stakeholders."
The new SSA tax could amount to 1 to 2 percent of a property's equalized assessed value, according to a preliminary report prepared for the association by consultant Business Districts Inc., Jones said.
Other downtown business organizations that get full or partial funding through SSAs are in St. Charles, Aurora and Elmhurst, consultant Diane Williams said.
The process would entail a series of public hearings during which property owners could express their opinions about the SSA. Final action would be taken by the Elgin City Council.
SSAs can start off short-term with a two- or three-year limit, Jones said. "You can establish it almost on a trial basis."
The city is not pushing the downtown association to look for alternate sources of revenue, Mayor David Kaptain said.
"We'll be supportive and see what happens," he said. "They have to try to involve the businesses that are down there and see how the businesses respond."
Before the association can pitch effectively a new SSA to property owners, the city should abolish the current parking deck SSA, Richard said. Jones agreed that would be the most effective course of action.
The downtown special service area, labeled SSA #2 on tax bills, was established in 1997 to fund the construction and maintenance of the parking deck, Assistant City Manager Rick Kozal said. Construction bonds were paid off in 2001, he said.
The city spends pretty much all of the $124,000 yearly SSA revenues on maintenance of the parking deck, he said. The SSA doesn't have an expiration date because maintenance is ongoing, he said.
Still, Richard objected to property owners being on the hook for that indefinitely.
"As a property owner it would be my desire to have that SSA discontinued as it should have been done years ago," Richard said.
Kaptain said he was not aware of a parking deck SSA.