Elgin wants to gauge support for new downtown tax
City council members want to formally gauge support among downtown property owners for a proposed new tax to fund the Downtown Neighborhood Association of Elgin - a move the group says blindsided them.
The new special service area of taxation, or SSA, would affect only businesses, not residences, in downtown Elgin and would pay for services provided by the DNA, currently funded by the city at $135,000 per year.
According to tax law, the city council has the authority to establish SSAs, but that cannot happen if 51 percent of property owners and 51 percent of voters in that area object.
But the law puts too much onus on objectors and too little emphasis on approval, city council members said at a committee of the whole meeting Saturday.
To counter that, they voted unanimously to seek formal feedback from property owners about whether they want the new tax. That will happen in a yet-to-be-determined fashion, possibly via certified mail.
"It's an odd way, how they wrote (the law)," Councilman Toby Shaw said. "The process is convoluted enough. If you were opposing it, you'd have to do a lot of research to find out who all the residents are, and the property owners in the area."
Shaw said he will not support establishing the new tax unless at least 51 percent of property owners are in favor. His colleagues didn't say that outright, but some seemed to be in general agreement.
The council's move was unexpected, DNA Board President Grace Richard said. "For them to change things at the eleventh hour, that is agitating," she said.
The tax would amount to 1.3 percent of a property's equalized assessed value as of 2002 or 2016, whichever is less, and would not increase beyond 2.5 percent, Richard said. The 2002 mark follows tax law and is the year of creation of a tax increment financing district downtown, DNA officials said. Also excluded would be churches and government buildings.
The city has encouraged the DNA to find ways to move away from city funding. The largely volunteer group has done research and gathered input on the proposed SSA for about four years and is planning to outline its proposal to the city council May 25.
Richard said she's confident the SSA has the support of the majority of property owners, but it's unclear how the city council's decision to get that feedback will affect the overall process, she said.
"There is a strict timeline for all this, and I don't know what's going to happen now," she said. "I'm going to have to meet with the board and talk with them."
City Manager Sean Stegall said he met with DNA officials recently and discussed gauging support for the SSA, possibly via a mailing; Richard said she did not take part in that meeting.
DNA Board Treasurer Karin Jones, who was at the meeting with Stegall, said she didn't think it would become a formal requirement. "For them to make changes in the process at this point in the game, it is disappointing," she said.