Des Plaines aldermen are studying three possible ways to meet bond payments that would eventually fund a $13.5 million library, billed as the centerpiece of a downtown redevelopment approved earlier this year.
Aldermen first addressed the question of how to pay for the bonds May 4, but decided Monday night to take no action until July.
City Manager Wally Douthwaite said his projections showed the source originally intended to pay the debt–a tax-increment financing district–could run short of cash by the year 2011 and fail to fully cover the debt.
By designating an area a TIF district, a city can earmark for specific uses, such as debt payments on bonds, future tax revenue increases that can be attributed to development.
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In a memo by Finance Director Jim Egeberg, city officials came up with two alternatives.
The first option, an increase in the city sales tax of one-quarter of a cent, would raise an extra $1.1 million annually and have the added benefit of having non-Des Plaines residents foot part of the bill, officials said.
The second alternative calls for implementing a telephone usage tax that would raise an estimated $300,000 for each 1 percent of tax charged.
Ald. Don Smith said officials potentially could tap the TIF income for bond service during the next several years and look for other revenue sources later, if it became apparent TIF revenue would be inadequate. No action was taken on his idea Monday night.
“I feel we should slow down and take our time” deciding on library funding, Ald. Carla Brookman said, adding that Douthwaite’s projections for TIF revenue might be underestimated.
In other action Monday, aldermen voted 4-3 to defer action on a proposal that could require Des Plaines residency for city department heads.
Further discussion of the proposal, placed on the council agenda by Ald. Tony Arredia, was postponed at least through the summer to allow aldermen time to discuss the issue with their constituents.
On Monday, even Arredia seemed lukewarm to the idea.
“I haven’t talked to any municipality that has implemented this idea that’s happy with it,” Arredia said.
The chief booster of the idea was community activist Vince Powers, a 30-year Des Plaines resident.
“What’s wrong with Des Plaines?” Powers asked the aldermen. “Let the department heads rub shoulders with our good citizens and become good citizens. I can tell you that if there were a referendum on this question today, it would pass big.”
In a memo, Douthwaite wrote that few area communities require local government officials to live in the towns in which they work, and that “a residency requirement will hamstring my ability to recruit the best possible candidates.”