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Gardner appeals ruling on use of TIF funds

Marsaglia rules GSW entitled to $400,000, can keep spending it the way it has been

Published: Saturday, Jan. 26, 2013 5:00 a.m. CDT

GARDNER — Judge Robert Marsaglia ruled in favor of Gardner-South Wilmington High School District 73 in its lawsuit against the village of Gardner for withholding tax money, but the village is asking the judge to reconsider.

The judge ruled in favor of the school district Dec. 31, 2012, but on Friday, the village filed a motion for reconsideration.

“The village feels he misapplied the law and we’re asking him to vacate the order,” said Village Attorney Scott Belt Friday.

Filing this motion halts the process so the village will not be paying the over $400,000 now, he said.

A call to Michael Perrott, superintendent of Gardner-South Wilmington High School, was not returned. A school representative said he was out of the office Friday on school business. 

In a press release sent from the school Thursday, before the village filed the motion for reconsideration, school board president David Doglio said, “I am pleased that this question has been answered for both the village and the school district. The funding from this agreement is important to the balancing of the district’s budget.

“The $400,000 owed to the district will help to balance the school’s budget and reduce, if not eliminate, this year’s revenue deficit.”

The Details

The school district filed suit in October 2012, alleging the village violated a 1986 Tax Increment Financing agreement under which the school should have received more than $400,000 in 2012.

The village maintained 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.

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, such as new construction or remodeling.

Through documentation ob-tained from the high school, Village Commissioner Dick Hileman said in October, it was found the high school was spending TIF funds on salaries and benefits for some employees, including the superintendent, which is not allowed.

In court Dec. 31, the judge ruled the district could continue to spend the funds the way it has been since the beginning of the agreement in 1986.

The order states that the agreement the parties have and the TIF Act are “mutually exclusive.”

“The funds garnered pursuant to the (agreement) may be used by the district as it has been for the past 26 years,” said the judge in his summary judgment.

The district argued its 1986 agreement is “unique” because it is similar to a license agreement.

According to the press release from the school district, “there is more than one type of TIF option and the agreement in question between the school district and the village is actually a rental/lease/license agreement, which differs from a traditional TIF agreement.”

The district states that the agreement it has with the village is for use of its recreational facilities to be used by the public when the school is not using them. Therefore, the parties have what is similar to a “park district agreement,” according to the release.

The village’s position is that the money coming in is tax money from the TIF and, therefore, is intended for capital expenditures, not payroll, said Belt, and this is inconsistent to what the TIF Act mandates.

“We believe the law says one thing and they believe the law says another,” he said.

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