Dist. 116 officials: Taxing district could hurt Round Lake schools
Round Lake Area Unit District 116 officials say they are concerned about a preliminary idea from a town within its boundaries that could reduce its annual property tax revenue.
At issue is a special taxing zone being considered in Round Lake Beach to collect extra money for infrastructure improvements in a mostly residential area bounded by Cedar Lake Road, Hawthorne Drive and Rollins Road on the village's south side.
Mayor Richard Hill said what's known as a tax-increment financing district would be the best way to pay for about $4 million in needed upgrades.
Under a TIF district, a municipality withholds from other local governmental units the extra property tax money from rising land values and pays for upgrades in that special zone. Schools, libraries and park districts are typically affected.
Hill said Round Lake Beach's plan would benefit District 116 over the long haul if new water mains, storm sewers and roads are built in that triangle-shaped area.
"It only improves the value of the homes," he said.
However, concerns about reduced property tax income surfaced at a District 116 board meeting Thursday night. Some of the skittishness comes because the district is emerging from what had been a financial mess that nearly led to its dissolution in 2002.
About $32 million or roughly 6 percent of District 116's assessed valuation is in the area where Round Lake Beach's TIF would be created, officials said. District 116 Chief Executive Officer Ben Martindale said the school system would be the local taxing agency most affected by Round Lake Beach's plan.
"The school district is on the threshold of recovery, financially," Martindale said.
District 116 board members Annette Negrette McKinley and Douglas Raul Williams said they have concerns about the potential financial effects. Williams was among the district officials in a recent meeting with the village.
"We're ramping up now," he said. "It's a difficult time to really propose something like that for the school district."
Hill said Round Lake Beach's south end is in need of at least $70 million in infrastructure upgrades that would begin with the area near Rollins, Cedar Lake and Hawthorne. He said the goal is to create the special taxing zone next year.
The village does not need approval from District 116 or other taxing bodies to create the TIF.
Since 2002, a school finance authority appointed by the Illinois State Board of Education has overseen District 116 operations. The district was near collapse because of its sorry financial condition when the authority received the oversight powers.
Elected school board members will regain control of decision-making powers for the next academic year. The state oversight panel will continue to monitor the District 116 board in 2010-11.
At one point, the district's short-term debt hit $14 million. Officials said the short-term debt has been eliminated and the district has an education fund $25.7 million in the black.