Modest as it was, during the last City Council meeting city staff reported some good news regarding Marengo’s two Tax Increment Financing Districts. Assistant City Administrator Josh Blakemore reported that the two districts are beginning to generate a little money. In the case of the Downtown TIF, we are talking very little money – about $3,000 per year. The East Side TIF is doing better; beginning with this most recent property tax disbursement – about $45,000 per year. This new East Side TIF money is primarily the result of the development of the new Dollar General. A small assessed property value increase to this East Side TIF total is expected to come on-line in two more years due to the recent mini-warehouse expansion at Highway 20 Self Storage.

Created in 2011, the two TIFs were established to offset development and redevelopment costs in the Downtown and on the East Side of the City along East Grant Highway. (The East Side District does not include areas north of the highway in and around Sullivan’s Grocery). This money comes from an increase in property tax collections in the TIF District, derived from increased property value normally caused by new development or redevelopment to that parcel. The money collected by the District is derived from the increment of taxation charged to property, resultant from the property’s value increase that would otherwise be sent to all property taxing bodies. Without the East Side TIF, the City of Marengo would get an extra $5,120 from Dollar General’s improvement; the two public school taxing bodies - Marengo District 154, Marengo District 165 - in combination would get about $24,920 divided about equally; McHenry County $4,090; the Marengo Park District $1,640; McHenry County College $1,600; and the six other property taxing bodies in combination would get about $7,630. (Compared to these government’s budgets, these increments are nominal.)

It was reported that the Districts need to spend money, even if it is a very small amount, for a capital improvement project by this time next year. If not, by law the Districts would be discontinued. If capital improvements are made, the districts’ life could be extended another 16 years. To date, no money has been spent in these Districts except for start-up costs and a small annual administration fee. The accrued cost for each District totals about $40,000 which is reimbursable to the City’s General Fund. (The General Fund has fronted this start-up/administration money.) Caused by very modest assessed property valuation increases during their initial life, the Districts’ budgets also have a small positive balance from the increments previously collected.

In the Downtown TID, a small sidewalk or parking lot improvement could be undertaken with the understanding that the start-up/ administration costs would also have to be covered within the next 16 years. In the East Side District, consideration can be given to undertake a larger capital improvement project that would either correct problems with existing infrastructure, or cut the cost of new development. The City Council will be making these decisions probably this spring.


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