GARDNER – The local and the state appellate court have both sided with Gardner-South Wilmington High School, but the village of Gardner is trying one more time to win a lawsuit the school filed for withholding tax money.
“When we have the money in hand, I’ll be convinced it’s over,” said Superintendent Michael Perrott. “I’m flabbergasted. It’s at the point of ridiculous now because I don’t know how far they want to push it.”
In April, the Third District Appellate Court upheld the Grundy court’s previous decisions in favor of the school. On Wednesday, the village of Gardner filed a petition for rehearing with the appellate court to have it look at the case again.
“The village is obligated to monitor TIF funds and make sure they are spent in accordance with of the law within the TIF act,” said attorney Bradley Nolden with Scott M. Belt & Associates, Gardner’s village attorney.
School District 73 filed the lawsuit in 2012, alleging the village violated a 1986 Tax Increment Financing agreement under which the school should have received more than $400,000 in 2012. Since that time, the village has paid all but about $70,000 to the school – the amount the village disputes.
The village maintains that, under a new law, it is required to make sure the taxing bodies are spending the TIF funds properly and it appeared the district was not.
A TIF district allows for municipalities to develop blighted areas by freezing equalized assessed values and using the monetary difference between the frozen EAV and current EAVs to fix up the areas.
The village argued the TIF money was only to be used for capital expenses, such as new construction and remodeling. When the village discovered some of the money, about $70,000, was being used for salaries and benefits, it withheld the money.
The school district argued – and so far the courts have agreed – its agreement is a license agreement, differing from a traditional TIF agreement, and allowed the district to use the funds however the school needs.
The district and the village’s agreement is for use of its recreational facilities to be used by the public when the school is not using them. In return for the use, the district gets a portion of the TIF funds. Because the agreement is for the use of facilities within the TIF district, the appellate court ruled in April the TIF act does not restrict how the district spends the funds.
“[Village finance commissioner] Dick Hileman said he just wanted to make sure this is legal, now there has been a decision two times at the local level and at the appellate level [saying its legal],” Perrott said.
The fact that the village keeps fighting the rulings is frustrating, Perrott said, because both parties have to continue to spend money on expensive legal fees.
Hileman could not be reached by press time.
According to the village’s petition, it feels the court has misinterpreted sections of the TIF act that could result in unintended consequences. It states the opinion is inconsistent with the legislative intent of the act.
“This is why the village is proceeding with the petition. We believe the TIF act specifies capital costs,” Nolden said.