Danville considers additional tax increment district
DANVILLE — City officials want to hire a firm to research whether to create another tax increment financing district in the city.
The agenda for the city council's public services committee Tuesday night includes a resolution to hire Ruyle Hullinger and Associates of Peoria to research areas of the city to determine if they would qualify for a tax increment district. The proposal does not specify what areas will be considered, and Mayor Scott Eisenhauer could not be reached for comment.
The public services committee will consider whether to recommend that the council hire Ruyle Hullinger when it meets at 6 p.m. Tuesday in the city council chambers in the lower level of the Robert E. Jones Municipal Building, 17 W. Main St., Danville. The committee also will consider a proposal for a new per diem and travel reimbursement policy for city employees. Both issues will go before the full council for final consideration at its next meeting in April.
The city already has two tax increment districts.
In April 2005, aldermen approved creating the Midtown district, which stretches from Fairchild Street to Seminary Street and from Gilbert Street to Hazel and Jackson streets, and the Western Gateway district, which generally stretches from Logan Avenue to Jackson Street and from North Street to the Vermilion River.
In a tax increment financing district, base-year tax assessments are made for all properties within the district. As assessments increase for those properties, the property tax revenue generated by the growth — the tax increment — is diverted into a fund that must be invested back into the district. The projects can include demolishing dilapidated structures, rehabbing buildings, replacing aging infrastructure, providing job training or retraining, administration or other costs.
Tax increment districts are not always favorable to other property taxing bodies, such as school districts, because they divert tax dollars from them. All of the property tax revenue generated by tax increment goes into the tax increment fund, rather than being divided among all taxing bodies.
One of the largest projects done using one of the city's existing districts was in 2006 in the Midtown district, when Carle moved its local primary care services into the vacant Shop Rite grocery store at 907 N. Gilbert St., allowing Carle to expand specialty services at its location at 2300 N. Vermilion St.
Because the property was in the Midtown district, the city offered up to $2 million in tax incentives to the developer of the property, Danville Medical Facilities Development, which is an affiliated company of Vermilion Development Corp., which leased it to Carle.
The most recent project involved providing T.h. Snyder Co., a woodworking firm at 640 E. Fairchild St., with up to $450,000 in Midtown funds to relocate its business from to the former Oak Street Millworks building on Oak Street. The Fairchild Street subway replacement project will cut off access to T.h. Snyder's facility on Fairchild, although the city has arranged for a new access drive from Fairchild Street to T.h. Snyder's building and to pay the company $250,000 for a temporary easement to do that work. But the company has decided to move to the Oak Street location.
Tax increment districts recently stirred controversy among Danville city aldermen when city administrators proposed using $574,000 in Midtown funds as a local match for a $750,000 grant to build an environmentally friendly parking lot and make other storm water runoff improvements at Danville High School, which is in the Midtown district.
Alderman Bill Black, Ward 7, voiced his concerns that using the money for an environmentally friendly parking lot at the high school did not fit the intent of a tax increment financing district, which is an economic development tool. He questioned how a new parking lot would ever spur more economic development. Black said there are several vacant commercial properties along Fairchild Street, including the former Arnholt's Bakery, where he would rather see money used to spur development.
Aldermen on the public services committee will also discuss a proposal for a new per diem policy for city employees who travel for business, including conferences and training.
Aldermen have discussed in the last several months the city's current policy of allowing employees to charge travel expenses to city credit cards.
Black has argued that credit cards can be abused and has lobbied, along with Rickey Williams Jr. of Ward 1, for a per diem policy, so administrators have created a proposal for them to consider.
City Comptroller Gayle Brandon said currently, city employees must turn in all receipts for any credit card charges made when traveling, and those receipts are then reviewed and compared with the credit card bill by department heads and then by Brandon. She said no alcohol is allowed to be purchased. A per diem is being proposed now, but for food purchases only.
Employees will still use city credit cards to pay for hotel stays. The city reimburses for mileage, and the proposal will include an increase in the city's longtime rate of 34.5 cents per mile to the Internal Revenue Service rate, which is determined each Jan. 1 and is currently 55.5 cents per mile.
She said the proposal also includes a new limit of $100 per night plus tax on the price of a hotel unless it's the hotel hosting a conference, training or other event the employee is attending.
Brandon said the proposal will not eliminate the use of credit cards by employees. Each department head has a city credit card that can be authorized for other city employees to use for day-to-day purchases. She said petty cash is used for very small purchases.