The District 200 Board of Education’s decision to sue the Village of Oak Park has generated criticism and concern in the community. However, the village’s public reaction includes significant misinformation and misrepresentation. On behalf of the high school board, I would like to clarify some basic points about the litigation and explain why we believed it necessary and prudent to take this action.
First, this TIF lawsuit is a contract dispute between two of the three parties to an intergovernmental agreement approved by District 97, District 200 and the village in 2003. In a Feb. 25 letter, the village agreed that it has not complied with the agreement. There is no question that the village has violated its agreement with the schools.
Second, the village itself first proposed this contract in 2002 to get the Oak Park school districts to agree to village plans to extend the downtown tax increment financing district for another 12 years. Through the creation of the downtown TIF, the village is able to divert property tax revenues otherwise due to the schools and other taxing bodies for economic development. Accurately predicting opposition to such an extension through 2018, the village offered a compromise. The resulting 2003 agreement between the village and districts 97 and 200 spelled out explicit terms and timelines to make the schools and the other taxing bodies “whole.” The village asked for this contract, not the schools.
Third, the central feature of the agreement requires the village to remove – or “carve out” – properties each year from the TIF so that their value can once again be part of the schools’ overall annual levies. The agreement allows the village to substitute specified cash payments in place of scheduled “carveouts.” The village has done neither. It has not made these “carveouts,” nor has it made the alternative cash payments. District 200 is not interested in forcing the village to come up with cash. Most of the lawsuit could be resolved if the village removes properties from the TIF, as spelled out in the contract. Only if the village chooses not to remove the specified properties is it required to pay District 200 and the other governing bodies.
Fourth, the village has received enough funds in the downtown TIF to pay the schools and other governing bodies. We do know that the downtown TIF has generated more revenue for the village than expected because the equalized assessed value amount in the TIF exceeds the original estimates at the time of the 2003 agreement. A Dec. 31, 2008, audit shows that there is enough revenue in the TIF to pay what the village owes. As a result, a full accounting of those funds is in order. That is part of the legal action. Moreover, state law is clear: The village cannot legally use TIF funds to pay for general administrative and operating expenses. So, using TIF funds to make these alternative payments to the schools and other governing bodies will not affect village general operations and revenues in any way.
Fifth, the school districts and village held a series of joint meetings in the spring and summer of 2009 to address the village’s failure to abide by the agreement. During those meetings, the village asked District 200 to explain its position in writing, which we did in detail in August 2009. The village did not respond for four months. In December, the village manager responded, recommending more discussions. He did not address the agreement’s requirement that the village remove properties from the TIF or make the alternative payments.
Sixth, parties to a contract do not have a unilateral right to change terms they later find inconvenient. After months of attempts to resolve this issue, the District 200 board decided the only way to resolve the matter objectively is to put it before a neutral judge.
Finally, village residents can be assured that, in all other matters, District 200 will continue to work positively and cooperatively with the village to the benefit of our citizens.
Dr. Ralph Lee is an Oak Park resident and acting president of the Oak Park and River Forest High School District 200 Board of Education.