Behind On Annual TIF Reports, Village In A Race To Catch Up Before Fines Hit

Nicholas Greifer
Nicholas Greifer, vice president with Kane, McKenna and Associates, in front of the Board of Trustees. (Photo: Michael Romain for The Village Free Press).

Sunday, May 18, 2014 || By Michael Romain 

MAYWOOD — Anyone interested in taking a look at Maywood’s Tax Increment Financing (TIF) report can go the Illinois Comptroller’s local government warehouse and type in “Maywood” in the search box.

Unfortunately, the results will only yield a message in bright red font: “Sorry, but Maywood Village has not supplied its required documentation for the last three fiscal years. No data is available.”

And Maywood isn’t alone. Despite the fact that every municipality in Illinois is required by law to submit those financial documents each year, a 2011 analysis by the TIF Illumination Project found that 44 percent of all state TIF’s “break the law” by not filing financial statements annually.

Illinois Policy Action reported last year on an April 2013 study by the Illinois Comptroller’s office, which discovered that between 2010 and 2012, 152 municipalities compiled 531 non-compliant violations. Maywood was among them, with 9 violations of its own, an amount that rivaled or exceeded that of towns such as Bellwood (11), Calumet City (10), Chicago Heights (10), East St. Louis (10), Forest Park (4), Oak Park (6) and Harvey (15).

For a long time, the Illinois Comptroller, the state office tasked with ensuring that municipalities comply with the law, could only notify local governments of their non-compliance through a letter (such as the one Maywood received recently), a phone call or a personal visit from a representative from the office. And if push came to shove, as the Southtown Star put it in an article last year, delinquent municipalities could “always file for a six-month extension, and another six-month extension and a third and a fourth. That’s two years worth of extensions.” 

Now, things have changed. A new law that went into effect this year gives the Illinois Comptroller’s office the power to actually do something about municipalities that don’t comply with the reporting requirements.

According to Senate Bill 2258, municipalities with populations of at least 800 or “having a bonded debt or owning or operating any type of public utility shall be audited annually.” The audits must be completed within 180 days after the close of a municipality’s fiscal year.

In Maywood’s case, unless an extension is granted by the Illinois Comptroller in writing, it has until November 1–since the Village’s fiscal year begins on May 1–to complete all of its delinquent audits.

If Maywood fails to report within the 180-day compliance window, fines may set in at “$5 per day for the first 15 days past due, $10 per day for 16 through 30 days past due, $15 per day for 31 through 45 days past due, and $20 per day for 46th day and every day thereafter.”

At a Legal, License, Ordinance and Committee (LLOC) meeting last Wednesday, Nicholas Greifer, a Vice President at Kane, McKenna and Associates, Inc., said that when his firm began preparing financial audits for Maywood’s TIF districts 3-4 years ago, the Village was 10-12 years behind.

Mr. Greifer was before the Board at the LLOC meeting to present a proposal to prepare the Village’s 2011 and 2012 annual TIF reports.

“This would be a top priority for me at the firm,” he said. “We’ll work very hard with the Village to get to that deadline.”

Maywood’s most recent TIF report was submitted in 2010. Had this law been in effect during the years since then, in each of which the Village has been non-compliant, it would be facing a not insignificant mound of fines.

For a sense of how costly things might have gotten, consider this. If one merely calculates the two years that Maywood was in non-compliance between 2011 and 2013, not counting the first 45 days before the $20/day fine sets in, the total comes to nearly $14,000 (assuming the fines also apply to non-business days).

Now, the Village is scrambling to get caught up  in order to avoid the fines. Village attorney Michael Jurusik said that staff has just completed the 2011 fiscal audits for the general fund and the three TIF funds.

“We’re trying to show the Comptroller’s office that we’re putting in place the consultants for the time we’re delinquent in our audits,” he said.

If the Board approves, Kane, McKenna and Associates will be brought in to assist with the preparation of those delinquent audits at a cost ranging from $2,500 to $3,000 for each Annual TIF Report–for a combined cost ranging from $15,000 to $18,000.

When asked by Trustee Cheryl Ealey-Cross why the Village had experienced delays in preparing the audits with Kane, McKenna and Associates in the past, Mr. Griefer cited logistical reasons, such as the challenge of gathering appropriate documentation, in addition to the fact that the Village was even further behind when his firm first came on board several years ago.

Mr. Jurusik said that that the 2012 audits should be completed by July. The Board voted 5-1 (Trustee Ealey-Cross abstained and Mayor Perkins was absent) to further the matter on whether or not it will utilize Kane’s services to the next regular Board meeting on Tuesday, May 20. VFP

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