By DEBORAH GERTZ HUSAR
Herald-Whig Staff Writer
PITTSFIELD, Ill. -- The Pikeland School Board adopted an agreement Wednesday with the city of Pittsfield on a second tax increment financing district.
The city this week finalized the new district which connects with the existing TIF district near the Lowry Motel, then continues west along U.S. 54 past the new water plant at Underwood Corners and takes in area on both sides of the highway.
TIF districts set a "base value" for property in their boundaries, then any increment, or any increase in property values from improvements, goes into a separate fund for 23 years to provide incentives for more improvement projects or local match money for grants. But that means taxing bodies, like the school district, lose out on additional revenue when properties are improved.
An agreement between Pikeland and the city made up the difference when the first TIF district was established. Work on a similar agreement to make the district "whole" with the new TIF was more challenging this time because of cuts in state aid, but "we can agree on the agreement," Superintendent Paula Hawley said.
Between the agreement with the city and what state aid makes up from the TIF, the district didn't lose anything with the first TIF, but with state aid prorated this year at 89 percent, and likely to be cut again, that could leave a funding gap.
Under the new agreement covering real estate tax years 2012, 2013, 2014 and 2015, if the district does not get all of its state aid in those years, the city will not reduce the annual reimbursement determined by the foundation formula calculation which would mean some additional revenue for Pikeland.
The city and school district will meet in 2016 to "evaluate the need to extend this provision," the agreement said. "Any extension of this provision beyond tax year 2015 shall require an amendment to this intergovernmental agreement."