Special Meeting Held
Members of the Pana City Council met in special session Thursday evening, Apr. 7, to take final action on the city’s Tax Increment Funding (TIF) District. The council also used the meeting to approve on first reading an ordinance approving an intergovernmental agreement between the four other taxing districts which share in the TIF area. This would be used following negotiations between the city and the taxing bodies.
The meeting was held in Pana City Hall before a packed house of mainly supporters and their families of the Pana School Board. The school board approved a measure at their last meeting to file suit against the city should they implement the TIF program.
But it was the city which has fired the first courtroom salvo. At the meeting Thursday, which included an hour long executive session, the council voted unanimously to allow Mayor Steve Sipes and the council to “file any and all litigation” to implement the TIF.
Friday morning, Apr. 8, the city’s attorney, Amanda Ade-Harlow, and the city’s special counsel for the TIF District, Dan Schuering, filed a suit in Christian County Circuit Court in Taylorville asking the court to review and validate the city’s TIF Program. Defendants in the case include the Pana School District, Pana Township, Christian County and the Lake Land College District.
“This action asks the Court to rule on the validity of the TIF District,” Schuering said. “Since the school district has raised issues concerning the process and the TIF validity, we are asking for court action to resolve this matter.”
The nine count suit reviews each of the steps the city took in approving the TIF District. The city contends all of the steps taken were within the scope of the state’s TIF laws and asks the court to concur.
Prior to the approval of Ordinances 1619, 1620 and 1621 to establish the TIF District. Pana School Board President Don Allen and Attorney Schuering addressed the council.
Allen said he was on the committee which first studied the TIF proposal and in studying the matter he found “a lot of good and a lot of bad” when it came to TIF districts. He felt the Pana TIF had a lot of problems.
“It (TIF) is way too much; too much money; and too large,” Allen said.
One of the main objections of the school district is the inclusion of the Walgreens property in the TIF District. When new assessments are made, it is expected the property will have a $500,000 valuation. Taxes will amount to nearly $50,000 on the property and the school district share is just over $26,000.
He said the district has tried to bargain with the city, but their offers of cutting their tax total by half was rejected. Another proposal, which would give half of all the incremental proceeds to the school district was also rejected. He asked the council to reject the proposed ordinance.
“This is the wrong approach,” Allen said. “I’m asking you vote no before it is too late. This is not right for the city.”
Schuering noted “The city’s view is much different than the school board’s.”
He said among the properties in the TIF District, the city was the second largest land owner and thus, no tax money on those properties were being generated. He felt it should be essential to get them back on the tax rolls.
Schuering said nearly 25 years ago, TIF was proposed when Wal-Mart and McDonald’s opened.
“But people said, ‘More development will follow,’ “ Schuering said. “In the past 25 years, Auto Zone and Walgreens have been the only development. We believe TIF will accelerate growth.”
The vote to approve the three enabling ordinances was unanimous, 8-0, each time.
Despite the impasse with the city and school district, Schuering said the city was open to “work with the school district to make it palatable to both.”
Schuering said the local units of government have the power to “opt out” of the lawsuit by filing papers with the court stating they will abide by the court’s ruling.