Elgin likely to renew contract with neighborhood association

The city of Elgin is expected to finalize another economic development contract with the Downtown Neighborhood Association of Elgin as the group works on trying to establish a new taxing district downtown for future funding.

City council members, meeting Wednesday night as a committee of the whole, preliminarily approved in a unanimous vote a two-year, $135,000 contract - the same amount as last year - backdated to April 1. The majority of the money, or $120,000, comes from the Central Area Tax Increment Financing District; $15,000 earmarked for marketing and communications, which cannot be funded by TIF money, comes from the city's general fund.

The association's contract with the city traditionally runs year-to-year, but council members decided to increase that as the group works on the new special service taxing area, or SSA, that downtown property owners would pay into.

Councilman Rich Dunne said the association's Executive Director Deirdre White told him the process takes about 16 months.

Councilmen John Prigge and Toby Shaw were not in favor of increasing the length of the contract but ultimately voted for it.

Local governments can establish SSAs, or geographically limited taxing districts, with the purpose of delivering services - in this case, services provided by the neighborhood association - to that area. The process entails at least one public hearing and a majority vote by the city council. The tax money would be collected by the city and disbursed to the Downtown Neighborhood Association.

However, the special service taxing areas cannot be created if an opposing petition is submitted with signatures of at least 51 percent of registered voters residing in the proposed area and at least 51 percent of property owners in the area, officials said. That has to happen within 60 days of the public hearing.

The association is working with consultant Diane Williams of Business Districts Inc. and is gathering input from property owners about the services they want, Deirdre White said. It's too early to say how much the special service taxing area would garner in taxes, she said.

"We are still in the gathering stages right now, but by fall we will have determined services, programs, the public hearing and the application to the city to establish the SSA," she said.

Somewhat complicating matters is the existence of another downtown special service taxing area, created in 1977, that funds the maintenance of the city's Spring Street parking deck.

There are 129 parcels in the parking deck taxing area that pay a total of $124,000 yearly in taxes, yielding an average of $961 per property owner, Elgin senior management analyst Aaron Cosentino said. However, tax bills vary greatly based on assessed values, he said.

The special service taxing area parking deck taxes were abated for 2015, meaning they won't show up on tax bills. The city council will tackle the dissolution of that taxing area at its next meeting on July 8.

The new special service taxing area would be about five times larger than the parking deck one, White said.

Tom Brockner, owner of Tom's Auto Clinic, said he believes that a new taxing area would foster greater collaboration to the downtown's benefit.

"I think the real key here is it ties the city, the Main Street community as we know it, the DNA, the building owners and the business owners all together in one group where multiple things can be discussed and worked with."

Property owner Grace Richard, who unlike Brockner is part of the current parking deck taxing district, said she's leery of paying more taxes. Still, the new taxing area, expected to be lower than the current one, would come with a big advantage - it would pay for services property owners want, she said.

Also, the cost of things like waste management and snow removal could decrease if everyone bands together, she said. "Any time you get to control of where your money is spent is a good thing," she said.