Metro-East News

School district supports proposed TIF in exchange for share of revenue

A map shows the preliminary boundaries of the proposed southwest corridors tax increment financing district and overlapping business district.
A map shows the preliminary boundaries of the proposed southwest corridors tax increment financing district and overlapping business district.

A preliminary agreement between Collinsville Unit 10 School District and the city states that the district will receive money for job training and other select projects in exchange for its support of a new tax increment financing district.

The memorandum of understanding signed by the mayor, which led school officials to change their stance on the plan, is still considered “non-binding,” Collinsville leaders said in a recent news release, because the TIF district has not been established.

The City Council will consider whether to adopt the proposed TIF district, which would encompass more than 850 acres along St. Louis, Collinsville and Bluff roads, at its June 27 meeting. A public hearing will take place June 13.

A Unit 10 representative was required under the memorandum to vote to recommend that the City Council move forward with the proposed TIF district during a May meeting of the 12 taxing bodies that would be affected by its creation. Five representatives from the taxing bodies, including the school district, voted in support of it. Two voted against it, another pair abstained and three representatives were not present.

School Board President Gary Peccola voted on behalf of Unit 10 on the condition that the city eventually enter into an intergovernmental agreement with the school district, according to the memorandum.

Two months earlier, when the city formally solicited input about the proposed TIF district for the first time, Peccola said publicly that the board opposed the plan because of the anticipated loss of future revenue.

“Any loss of revenue directly impacts the students in a negative fashion,” he said at the time. Collinsville schools had to make cuts, including the elimination of eight teachers through classroom consolidation, and more cuts would be on the way, according to Peccola, so the district felt it couldn’t support the plan.

That was in March. By May, Peccola said a majority of the seven-member school board supported the plan because of the memorandum, under which loss of revenue would no longer be an issue.

“The city is willing to work with the district and get us the money that we would have been losing because of the TIF district,” Peccola said previously.

If the new TIF district is created, Unit 10 would receive 42 percent of its annual incremental property tax revenue each year during the lifetime of the TIF, which is typically 23 years. That money would come from a special tax allocation fund.

Creation of a TIF district would normally freeze property taxes for schools and other taxing bodies.

The memorandum includes an example to illustrate how the city will calculate its payment to the school district:

▪  TIF district initial equalized assessed value: $22 million

▪  TIF district EAV for the 2016 tax year: $23 million

▪  Tax rate for the 2016 tax year: 7.0

The TIF district’s incremental property tax revenue is $70,000 in this example, so the city would give the school district $29,400.

The agreement states that Unit 10 would use the money for a vocational training program and other TIF eligible projects, like the renovation, repair and expansion of the two school buildings located in the proposed TIF district. In addition to these annual payments, the city would provide other assistance from the special tax allocation fund for TIF eligible projects “from time to time,” according to the agreement.

Unit 10 would also be able to apply for more TIF funds like other businesses and taxing bodies.

The proposed TIF district would also have an overlapping business district, according to the city’s plan. Leaders hope to use potential revenue from the business district to install a fiber data network and to expand Collinsville’s Wi-Fi throughout the proposed district, from which students living in the area could benefit, according to the city’s news release.

Schools in the proposed district would have “reasonable access” to the free Wi-Fi, too, under the memorandum.

The agreement also stipulates that the city would not allow development of new housing, other than retirement housing, senior citizen housing, assisted living facilities, nursing homes or other similar housing facilities.

Mayor John Miller describes the memorandum as representing “an excellent opportunity for further partnerships for both the school district and the city to move the community forward,” according to the news release.

The entities explicitly agree to “each commit to a proactive promotional partnership for the purpose of mutually marketing and promoting the school district and the city” under the memorandum.

In addition to Unit 10, some business owners and chamber of commerce representatives have publicly expressed support of the proposed TIF district.

A majority of the City Council, including Miller, Councilman Jeff Stehman and Councilwoman Cheryl Brombolich, has also previously voted in favor of moves to create the district starting in January.

Council members Nancy Moss and Jeff Kypta do not support the plan. Most residents who have spoken publicly so far stand firmly against the plan.

Lexi Cortes: 618-239-2528, @lexicortes

Up next

  • June 13: A public hearing will take place during the City Council meeting at 7:30 p.m. at the Gateway Center, 1 Gateway Drive, Collinsville.
  • June 27: The City Council will vote on whether to adopt the proposed TIF district and overlapping business district at the City Council meeting at 7:30 p.m. at the Gateway Center.
Related stories from Belleville News-Democrat