East Dundee contributing $10,000 to library district

East Dundee is offering the local library district an annual $10,000 to account for new residents living within a special taxing district.

Since the village's Route 72 and Route 25 tax increment financing district was established in 2007, two new affordable housing developments - Gardiner Place and River Haven Place - have been built in the project area.

Noting that the developments also fall into the Fox River Valley Public Library District, Director Roxane Bennett argued that the library was responsible for serving hundreds of additional residents without receiving any more property taxes.

"TIFs do provide a great benefit in terms of spurring economic growth," Bennett said. "But if they have residents in them, that adds to the service burden of the library without giving the library any additional revenue."

In a TIF district, the property tax revenues that go to local governments are frozen for 23 years at a certain level, which is set on a base assessed property value. Any taxes generated above that level can go back into redevelopment.

The property tax freeze can often affect the library district's services, Bennett said, because roughly 95 percent of its revenue comes from property taxes. As per the TIF Act, however, the library district can receive some of the village's TIF funds if new residential property is built in that area.

Though Bennett initially requested upward of $15,000, East Dundee trustees agreed Tuesday to pay the library district roughly $10,000 per year for the life of the TIF.

The amount is based on the 230 new residents eligible to receive a library card, village officials said, as well as the library's estimated $43.27 annual cost of serving each resident.

The money, Bennett said, will go toward helping to "offset the cost of providing that additional service to new residents."

The terms of the contribution are conditional, Village President Lael Miller said. The village board will decide on an annual basis if and how much they should pay the district.

"We're not locked into anything," Miller said. "It's going to be at our discretion."

The library district this year is operating on a roughly $3 million general fund budget, Bennett said, adding that "every penny matters."

"We've got a great relationship with East Dundee, and we know their intention is to support the library," she said. "This is relatively a drop in the bucket compared to the whole budget, but we're pinching pennies."