Able to read the writing on the wall, village president John Rigas contacted the two universities in River Forest – Dominican and Concordia – shortly after the spring elections in 2009. His message wasn’t exactly welcome news for the schools. Anticipating potentially severe budget shortfalls at village hall, Rigas warned that trustees may ask the schools to begin making annual payments to the municipality.
Dominican and Concordia are both exempt from paying property taxes, but the campuses are still serviced by the police, fire and public works departments. There is certainly a cost associated with those services, said Rigas, and now may be the time to identify exactly what it is.
In a November 2009 memo to a subcommittee charged with scrutinizing River Forest’s annual budget, Village Administrator Steve Gutierrez said taxpayers shell out more than $410,000 a year in services to Dominican and Concordia. That figure has been forwarded to both universities and is the starting point for negotiating a potential compensation package to the village.
“I think it was a baseline,” Amy McCormack, vice president of business affairs for Dominican University, said of Gutierrez’s calculation. “I wouldn’t qualify it as a good baseline.”
McCormack is working with her counterparts at Concordia to formulate a response to the village’s suggestion that the schools pony-up hundreds of thousands of dollars – none of which are they obligated to pay. Most likely, that discussion will take place in May, said McCormack.
“Our first course will be to see if there are services we can provide that will save the village some money,” McCormack said.
One of the problems with their opening figure, according to McCormack, is the village makes no attempt to account for all the benefits taxpayers reap by having two universities in town. Some of that – public use of the athletic fields and libraries, for example – will be easier to quantify. Other aspects, such as being the town’s primary outlet for the arts, are tougher to put a dollar amount to.
At the very least, said McCormack, River Forest includes both student populations in its census tally, for which it collects state and federal money.
Gutierrez acknowledged his figure is based on a “fairly rough methodology” and fully expects the schools to make a counter offer. Using 2008 data, the village counted the number of police and fire calls generated by the schools. According to the village administrator’s memo, 4.6 percent of all police calls that year, and 6.4 percent of all fire department calls, can be attributed to the universities.
Those percentages were then plugged straight into each departments’ respective budget.
For public works, the same calculation applies only it’s based on the amount of street frontage maintained by the colleges.
McCormack said she’s confident that some of the emergency calls linked to Dominican and Concordia were actually neighborhood traffic stops and unrelated incidents in Thatcher Woods. Both schools are located off Division Street.
“As we looked through the details, there were a number of calls associated with Dominican that had nothing to do with the college or the student body,” she said.
James Winikates is a River Forest trustee and sits on the board of trustees at Dominican. He plans to recuse himself from any votes taken by either side. Winikates and others at village hall recognize that state law in Illinois gives taxing bodies no leverage in these discussions. Any payments negotiated in lieu of taxes are entirely voluntary.
“You can’t force a school to do it,” Winikates said.
Particularly on the East Coast, where there are more colleges, arrangements such as the one being sought by River Forest are more common than in the Midwest. In Boston, a city heavily-populated with post-secondary institutions, many of the colleges agree to make such payments.
State senators in New York are considering a bill that would require non-profits to pay property taxes.
And in Pittsburgh, the mayor there is pushing his city’s colleges to accept a 1 percent tuition tax he’s dubbed the “fair share tax,” according to a New York Times article.
That the village’s request isn’t unprecedented doesn’t mean it would be any easier for the colleges to bear. The same economic downturn that’s hurt municipal coffers is also having an impact on higher education, said McCormack. She estimated that 40 percent of the students at Dominican receive some kind of state or federal grants. But those funding sources are drying up in the recession, and the school anticipates being asked to provide additional financial aid.
Dominican’s endowment, like funds at other colleges, has also taken a hit. Typically, endowment earnings contribute about $800,000 to the school’s operating budget. This year, said McCormack, that figure will be cut in half.
CONTACT: jadams@wjinc.com