Elgin downtown taxpayers clash with city over spending

After getting the city council to disband a nearly 40-year-old special tax district last month, property owners in downtown Elgin want to control the purse strings and policies of a similar and potentially larger district.

Downtown property owners near the Spring Street parking deck complain they paid additional taxes for more than a decade after the parking deck's construction costs were paid off and that they have no say in how those additional taxes are being spent. About 90 pieces of property were affected by the tax.

“The accounting is very vague,” complained Karin Jones, a property owner in the special service area and treasurer of Elgin's Downtown Neighborhood Association. “There's an expense, a transfer out, but there's no breakdown, so we just don't know.”

Elgin collected almost $864,000 from the property owners over the last nine years, audits show, but transferred nearly 75 percent of it — $645,000 from 2005 to 2013 — into the city's general fund. Data is not readily available for years before 2005.

But City Manager Sean Stegall said the money covered the city's costs of operating and maintaining the parking deck, as allowed by the special taxing district's 1977 charter.

“All the funds have been properly accounted for,” Stegall said. “It's primarily personnel, but also includes utility bills and supplies.”

With 288 parking spots, the Spring Street deck represents roughly a quarter of all available deck parking in the city. But the $80,000 transferred out of the special tax district fund in 2013 represents more than 31 percent of the city's $254,747 parking services costs. And the affected downtown property owners argue that unlike the surrounding property owners near the two other parking decks, they are solely responsible for covering those operational costs.

But Stegall disagrees.

“Some felt they were overcharged,” he said. “If anything they were undercharged because we hadn't set aside money for future capital replacements. Spring Street is the oldest and requires the most maintenance.”

The taxing district was created with no expiration date in 1977 to fund construction of a $2.6 million parking deck. The deck was completed in 1982 after a protracted court battle over the legality of establishing the special service area. The construction debt was finally paid off in 2001, according to city records.

Jones said if a new downtown special service area is created, property owners should have control over the funds generated.

“We want better oversight and a defined life span,” she said. “The use of the funds would be determined by what the needs of the property owners are. It's clear property owners need to pay attention and have a voice so that there's some accountability.”

It would also give the property owners authority to increase and decrease levies. The amount collected through the tax nearly doubled over eight years, going from $66,420 in 2005 to $124,122 in 2013, according to city audits.

Stegall said the hike coincided with safety upgrades to the parking deck and maintenance to the deck structure. Invoices provided by the city show more than $135,000 was spent on security cameras and other electronic equipment as well as infrastructural repairs since 2009. The city will cover future maintenance and upgrades.

According to the city's 2015 budget, there is more than $138,000 left in the taxing district's reserve fund. Some property owners say they want it back.

“I would hope at the next (association) meeting we will bring it up that the property owners are requesting a refund,” said Grace Richard, Downtown Neighborhood Association co-president and a property owner in the SSA.

Stegall believes the council is fine giving the downtown association sovereignty over the tax revenue generated by a new taxing district.

“The city would provide the same level of autonomy traditionally found in other downtown SSAs,” he said.

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Contact Jake at jgriffin@dailyherald.com or (847) 427-4602.