Lake Zurich trustee can't vote on TIF she lives in
Before Suzanne Branding became a Lake Zurich trustee, she bought a home downtown that she and her husband, Fred, later converted to a bed and breakfast.
The 104-year-old Shady Oaks Bed & Breakfast at 15 Lakeview Place, where Branding now lives, lies in the center of town -- perhaps a good place for an elected official.
But Branding's home also is within the boundaries of a special taxing district established in 2002 to spur downtown redevelopment.
For this reason, the village attorney and the Lake County state's attorney's office have advised Branding to abstain from voting on matters related to the tax increment financing district, or TIF, to avoid a conflict of interest.
That doesn't sit well with Branding, who says she was elected in April 2007 by voters concerned about downtown redevelopment.
"I think people who are affected by the TIF (district) definitely wanted some representation, and they aren't getting it," Branding said. "To not be able to vote would definitely be a problem."
Municipalities use a TIF district to freeze property tax payments to local governments for up to 23 years. The extra tax revenue collected from owners as the property is developed and increases in value is used to pay off the original improvements.
State law prohibits elected officials from having a financial interest in any municipal contract, work or business.
Village officials are now considering whether to amend the district's boundaries to remove Branding's property.
Mayor John Tolomei first raised concerns over a conflict of interest a month after Branding took office. He said a village consultant learned at a TIF seminar that there was the potential for a problem.
Since then, Branding has abstained from voting on TIF matters, which hasn't been much of an issue as the redevelopment effort has been dormant for the past year.
But the village recently hired a developer and architect to revise its master plan and revive downtown redevelopment projects.
Tolomei asked for the state's attorney's opinion as to whether the board's actions could be later challenged, if Branding voted.
"I'm pretty well-satisfied now that that's not a problem," Tolomei said. "The only issue that the state's attorney raised with respect to her voting would be issues that affect her personally."
Branding's dilemma is not unique. Similar conflicts have arisen in other suburban towns with TIF districts.
Longtime Palatine Mayor Rita Mullins owned a home in a downtown business district that became part of a TIF district in 2000. Mullins said extracting her property may have hurt development of that entire block.
Mullins couldn't vote on TIF issues for four years even though, as mayor, her vote counted as a tiebreaker. She also physically removed herself from the room when the board discussed TIF matters.
"It does give you that feeling like your hands are tied," Mullins said.
Mullins eventually sold her house in 2004 and regained her voting power.
Some Lake Zurich trustees say the cost of removing Branding's property from the district -- $12,000 -- and the resulting loss of tax revenue are reasons to not do anything.
Branding's property generates roughly $7,000 in yearly revenue, and would generate more than $100,000 over the life of the district, that could be used for redevelopment.
Branding's supporters say her vote is more valuable.
"She was the second-highest vote-getter in the election in a six-way race," Trustee Tom Poynton said. "Obviously, there are people out there who elected her for her voice. She is now muffled because of a state law, which nobody knew about."
The village attorney is now looking into whether removing Branding's property from the TIF may give rise to future challenges to the district.
"You'd end up opening a door where you would have to allow other people to be considered to be removed from the TIF, as well as to be included," Village Administrator Bob Vitas said. "It just opens up a Pandora's box."
The village board is expected to discuss and vote on the issue at a future meeting.