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GSW, village at odds over TIF funds

District 73 files complaint after Gardner withholds payment

GARDNER — Gardner-South Wilmington High School District 73 has filed a complaint against the village of Gardner after it did not receive funding designated to the school through their Tax Increment Finance agreement.

The village maintains it does not want to keep the money owed to the district, but the village has to make sure it is being spent properly, and it appears it is not, said Village Commissioner Dick Hileman.

According to a press release from the school district, it filed its complaint Thursday because the village violated their intergovernmental agreement entered in 1986.

"Under the terms of the agreement, the village is required to send tax increment finances (TIF) funds it receives from the county to the high school district within five days of receiving the funds. The district then uses the funds to pay for repairs, improvements and renovations of high school district facilities," according to the release sent over by Superintendent Michael Perrott Friday morning.

Neither Perrott or Board President Dave Doglio were available to give comment before press time.

"We don't want the money, we want to give it to them, but we have to be sure it is being spent in the right place," Hileman said.

A TIF District freezes the assessed value of properties in the district. Any tax money increases in value of those properties then goes into a special fund to be used to improve properties in the district. That money is dispensed by the village.


In recent months, the village has asked the high school district, Gardner Grade School District and the Gardner Fire District for budgetary documentation to see where TIF money is being spent.

It was discovered through litigation between the former Gardner Fire Department and fire district that TIF laws have changed. It is now the responsibility of the village to certify that the entities are spending their TIF funds according to the law, Hileman said.

The Illinois TIF Act requires the creator of the TIF, in this case the village, to be responsible for reporting and accounting requirements.

The law states the funds are only to be spent on capital expenditures, Hileman said, such as new construction or remodeling.

When the high school finally gave the requested documents, which took several months, Hileman said it was found that the high school was spending TIF funds on salaries and benefits for some employees, including the superintendent.

"The high school budget documents provided indicate that a portion of the various employees salaries were paid by TIF funds. This, in our opinion, is not allowed to be paid from TIF funds," as stated in an Oct. 4 letter from Herbert Klein, of Jacob Klein Attorneys at Law, the village's TIF attorney, to the school district's attorney.

Hileman said the village tried to work with the high school district to correct the problem, but instead they received a court complaint.

According to the school district's complaint, the village is in breach of contract by not paying the school within five days of receiving the TIF money. It states the district has "been spending, and will continue to spend, TIF funds in accordance with the terms of the contract and Illinois Law."

The complaint continues to say the school district this year has in excess of $600,000 in costs related to the rehabilitation, reconstruction, repair or remodeling of the district's existing public high school building.

In the press release from the school, it states up until recently, the village has always given the district its designated amount of TIF money on time. The lack of payment has caused hardship and additional expenditures to the district.

The school is expected to receive $428,575 of TIF money this fiscal year, according to a letter from Superintendent Perrott to Gardner Mayor Tom Wise, dated Sept. 25.

Over several months, the district has provided the village information it has requested related to the funding, Perrott said in the letter. Despite giving the requested information, the district has still not received its funding, even after Perrott's requests for the payment.

"The high school and village have worked together for many years for the benefit of all their residents, but as of late, the village has stopped cooperating with the high school and violated the (agreement) without justification," Doglio said in the release.

"We believe that the action of filing a complaint will demonstrate how serious the high school views the village’s actions, and the high school will take any and all action to protect the financial stability of the high school for now and in the future," he said. 

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