KANKAKEE — Instead of facing a $402,100 budget shortfall, the Kankakee administration now has a pending budget with a surplus of $51,000.
It is anticipated the 2019-20 budget — still being completed — will be approved at Monday’s Kankakee City Council meeting.
The about $24.8-million budget was saved after the city’s new law firm, Odelson & Sterk Ltd., of Evergreen Park, asked if the administration had been reimbursing itself for legal, administrative and accounting expenses connected to the city’s six tax-increment-financing districts.
Comptroller Elizabeth Kubal explored the question and learned the city had not reimbursed itself for qualified expenses in two of the districts — TIF 1 and TIF 8.
TIF 1 is the downtown district set to expire at the end of 2018. TIF 8 is better known as the Exit 308 district, where the Super Walmart and Hilton Garden Inn are located.
Once it was determined the city had not been reimbursing itself for general fund expense through these two TIF districts, they set out to learn if the lost reimbursements from years past could be reclaimed.
They were told they could.
At the June 25 Budget Committee meeting, Kankakee City Council members began openly talking about making personnel cuts within the police and fire departments as a way to balance the budget.
So, it appears the crisis has been avoided for this fiscal year.
The 2018-19 budget actually expired April 30. The city council passed a continuing spending resolution, which allowed them to continue spending based on the previous year’s budget as they searched for ways to balance this year’s document.
“If it were not for this, we would have had no place to look other than personnel,” said Alderman Dennis Baron, R-6 and Budget Committee chairman.
Baron said because general fund money had been spent on projects within these TIF districts, he was confident the reimbursement would be allowed.
“From what legal opinions have shown is this reimbursement is supported by state statue. This is great.”
A TIF district is a public financing method which is used as a subsidy for redevelopment, infrastructure and other community-improvement projects. The money must be used for projects within the defined district in which it was generated.
Kubal said the city failed to reimburse itself $13,000 to $17,000 from each fund dating back to 2005, a period of 13 years.
In general terms, she said, the city had failed to reclaim about $450,000 during this 13-year period for legal services, accounting and administrative costs its staff had devoted to managing the TIF districts.
Both Kubal and Baron noted the reimbursed money will not affect any pending activities slated for the those districts. The city is having a beautification program developed for the downtown area being funded by this TIF.
The money in this expiring TIF district must be spent by year’s end. If it is not spent, it must be returned to the taxing bodies — such as Kankakee School District 111 and the Kankakee Valley Park District — which gave up the money as part of the agreement.