Economic Development vs Community Development

Random thoughts from last week’s budget meetings for the City of DeKalb…

Self insurance

If the new city council so chooses DeKalb will no longer be self-insured in the areas of liability and workers’ compensation. There is enough room between revenues and expenditures to fund the change in that status.

For city taxpayers who are on the hook for any and all larger claims, a “normal” year costs around $900,000 in workman’s comp. If a catastrophic liability claim was awarded the taxpayers are forced to bear the brunt and costs of borrowing the money required to settle the claim.

It would seem like a no-brainer for the City to buy insurance or into a pool for group coverage. But the coverage would begin anew and would not cover any existing claims.  There has never been any official word offered on the status of the Monster Truck accident of several years ago.  It appears that a multitude of lawsuits are festering at the DeKalb-Taylor Municipal Airport. Public discussion by city officials is limited in pending litigation and workman’s comp. We may not know the extent to which existing claims are a factor in the city council’s decision on the self insurance issue.

Reducing such claims must become a high priority for all concerned with the City of DeKalb. The administration should be held accountable for reaching that goal.

Capital Projects (Public Facilities)

Prioritize the following public facilities improvements for the City of DeKalb on a scale of 1-10 with 10 being highest priority…

• Police Station
• Fire Station (southside)
• Library
• City Hall
• Water Tower

That’s how I think the city council should approach public facilities. They need to get everyone’s wish list, determine a funding source and prioritize (almost in that order). Otherwise the city’s debt will mushroom. For those thinking I’m perhaps Utopian — ideally there would be an intergovernmental board of capital projects with the same mission.

Economic Development vs Community Development

When economic development is the goal of TIF — the project often becomes long term. A TIF district often lasts 23 years or more, if extended. TIF economic development tends to require borrowed funds. The longer the term the lower the repayment on bonds.

But those who reside or own property in what must be declared a blighted neighborhood (for TIF districts to be created) may well only share in the cost of the program. Residents of blighted neighborhoods might be paying for their own removal under economic development TIF.

If TIF is used for community development the benefits are felt more immediately. TIF could be used to improve energy efficiency in a neighborhood home-by-home, for example. In tough times like these TIF provides funding to address vacant foreclosed property and the deterioration it leads to. Local business participation is more likely and that’s a side benefit.

Assuming a blighted area is home to residents who need help it isn’t difficult to think that job retraining would be a better use of TIF monies than a skating park for another example. Job retraining might put some TIF dollars into the hands unemployed residents of a TIF district who would then hand that money over to one of the institutions of DeKalb’s largest employer as an industry — education. Another barrier for the un-and-underemployed in the family-raising years is the cost and/or availability of childcare. A day care center can be funded with TIF.

For more ideas on how TIF can legally be spent, check this out, and this too. For a shining example of how TIF can be used for community development visit the Pond-Fisk Avenue neighborhood.

The theory here is that if a TIF district’s residents do better they’ll be more apt to fix up their homes and invest in their community. I’ll bet they’re happier with their city government, too.

The alternative is the current approach to TIF and that’s troublesome.

The overarching assumption made thus far is that the economic development aspects of the TIF model will be successful. As the Illinois DCCA states, “There is no guarantee that a redevelopment project by the municipality will actually generate the expected new private investment. As a result, a municipality that uses tax increment financing could be left with a financial liability associated with the TIF process.” In such cases where the required private investment does not occur, the debt incurred by the municipality must be repaid and will most likely result in the raising of taxes.

Therefore, when TIF is unsuccessful, the local community is left with the very heavy financial burden from the initial debt incurred to acquire land and make physical improvements to attract private investment. — Danny Santivasci, Illinois State University

Visionaries with blinders on

The most shocking thing learned from week one of the budget meetings is the lack of civic awareness of the proposed 17 county mega-dump in Cortland. A grassroots citizen group that I’m a member of is fighting it. It’s at the Illinois appellate court level in the process to the federal supreme court.

If money talks and all else walks a 2.5 mile 140-foot mountain of garbage will be built over the next 40 years as a calling card to welcome folks coming from the east to DeKalb County. Some of that traffic will be large trucks filled with other people’s garbage. They’ll get off I88 at Peace Road and go north to Route 38 and then east to Somonauk.

The garbage intake at the dump will increase from 140 tons per day currently to around 2100 tons per day each and every day for the next 40 years.  That’s a lot of trash. That’s a lot of trucks. Big trucks are hard on roads.

DeKalb County government is getting a big chunk of tipping fees as their share of Waste Management of Illinois profits. The Town of Cortland got a million bucks to not oppose or help anyone else who might oppose the dump. They’ll get a buck a month per household if the dump goes through. That’s why no Cortland officials could be seen at the one and only Siting Application Public Hearing.

There were no City of DeKalb officials there either. But when I asked if the City of DeKalb would be getting any recapture of its Peace Road and Route 38 investments the answer was, “No.”

Before I gave the DCEDC one penny of their $72,000 request I think I’d ask Paul Borek how he thinks the 17 county dump will benefit DeKalb, from an economic development standpoint. Community development? Don’t bother.