Trustees at Monday night's workshop discussed whether Non-Home Rule Sales Tax funds could cover the tax increment financing debt, which is due in 2014.
At the 2010 Joint Review Board/TIF meeting, it was revealed that $40 million to $50 million in investment, new building and businesses was needed within the TIF in order for the Incremental Revenue to increase enough to pay for the debt service and operation costs of the TIF, said Finance Director Al Zochowski. For example, he said, $50 million dollars of improvements would generate about $1 million dollars annual of additional Incremental Revenue.
“There is going to be a point in time, about 18 months from now, that the village won’t be able to pay the interest, debt and other obligations in the TIF,” said Village Administrator Bob Vitas.
If the debt obligations of the TIF cannot be met, that burden would fall on Lake Zurich taxpayers.
Since the November 2010 referendum question stated non-home rule sales tax funds could be used for public infrastructure or property tax relief, Trustee Terry Mastandrea questioned whether the village could utilize non-home rule sales tax funds to avoid raising property taxes in case property taxes would have to be raised to support TIF debt obligations.
Vitas suggested the question be posed in the near future to legal counsel.
Village officials also were set to meet with the Lake County clerk Oct. 25 to determine if negative increments in the TIF district can be calculated separately to lessen the negative impact on the TIF district.
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