Palatine will dole out surplus funds from taxing districts

It's a particularly happy holiday season for a handful of local taxing bodies thanks to the village of Palatine.

The Dundee Road and Dundee/Rand tax increment financing districts, which stretch between Hicks and Rand roads, have been so economically successful that the village has a $3.1 million surplus to be distributed among affected taxing agencies.

The biggest winners are Palatine Township Elementary District 15 and Palatine-Schaumburg High School District 211, who will receive about $1.06 million and $857,000, respectively.

"Its mission is accomplished so far," Village Manager Reid Ottesen said about the TIF districts. "We still have some work ahead of us but we're all going to benefit from this. Everyone is scraping by right now."

Ottesen said the districts have generated more money than anticipated since they were established in the mid-1990s. TIF districts are created to encourage development. As the value of the property increases, the additional property tax revenue is reinvested into the project area.

Palatine paid off its existing debt nearly a decade early, so officials decided to distribute the surplus money in light of the economic downturn instead of letting it accrue. Ottesen said the village will re-evaluate the districts to determine whether any additional development projects are warranted, such as intersection improvements, addressing overhead utility lines or creating incentives to bring a new tenant to the vacant Linens 'n Things building. If not, the TIF districts could be terminated.

Ottesen can't recall another municipality ever giving out surplus TIF money other than Deerfield several years ago. Palatine will send its funds to Cook County, which will distribute the money to affected agencies based on their share of the total tax rate. In addition to Districts 15 and 211, Harper College, the township, library district, park district and Cook County will benefit. The village itself will receive about $406,000.

"The scope of the impact of this is huge," Councilman Scott Lamerand said. "That's $406,000 we didn't have to look for a cost reduction."

There are also TIF districts along the Rand Road corridor and in downtown Palatine.