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Thursday, September 29, 2011

Village, school district stymied by missing third agreement.

In mid-September, Maroa-Forsyth School District made the last of three equal yearly payments of $92,500 to the Village in order to own the 20 acres of land where the district’s elementary school now sits on County Highway 20.

That final payment completed the second of two intergovernmental agreements executed by Village staff and the school board beginning in 2007. The first agreement outlined a transfer of sales tax revenue from the Village to help cover the district’s bond payments for a $15 million elementary school after voters overwhelming approved a 2007 referendum increasing Forsyth’s sales tax by .05 percent just for that purpose. The new elementary school subsequently opened in fall 2009.

However, voters were also told in 2007 that there would be a third agreement to address a plan for the school district to pay back the Village for the sales tax revenue used to build the new school.

For reasons not overwhelmingly agreed upon by both boards at this point, the third agreement was never executed and not publicly addressed until the Sept. 6 Board meeting. At the meeting, Jim Peck, school board president, said negotiations stalled when the school board was told by its bonding agent that a plan to pay back the Village through a lease levy was not legally permissible. He noted that the only recourse for the district would have been to pursue a property tax increase, which the district did not see as feasible after having obtained one from voters to build a new high school only three years earlier.

Although Peck confirmed a third agreement, for repayment, had been discussed, he said the school board had not seen the draft of it prepared by Village Attorney Darrell Woolums until only recently. Mayor Hap Gilbert and Peck agreed that discussion on the third agreement may have been sidetracked in part due to a transition in Village administrators, although Gilbert noted the repayment plan was one of the selling points of the referendum presented to voters and “...it was the school board that recommended that method of repayment.”

Peck said the Village “is not really ‘out’ any money” without repayment from the school district and agreed to send the Village a formal letter outlining the school board’s position and historical perspective on what happened.

Despite the lack of a third agreement, the Village has made payments to the school district totalling more than $3.5 million to date, based on the additional sales tax revenue generated by the .05 percent tax increase.

The missing third agreement became apparent in recent months and has affected the school board’s request to purchase an additional parcel of land adjacent to the elementary school as a proposed site for the new middle school the district hopes to build within the next 15 years.

Trustee Larry Reed, who was a Board member during the 2007 negotiations, says “...we were plowing new ground. We’re now seeing that we have some problems, but that’s because [what we did to finance the grade school] was new.” Reed felt the school board’s new land request should be handled as a straightforward purchase of property not related to the earlier intergovernmental agreements.

However, Village Administrator Heather Kimmons and some of Reed’s fellow trustees were cautious. “I cannot in good faith say we should move forward on any new transactions [with the school district] until we complete this first one,” Kimmons told Forsyth trustees at their Sept. 6 meeting.

“I want a clear understanding of what did take place,” said Village Trustee Kerstin Trachtenberg. Village Trustee Bob Rasho also urged caution, wanting to wait until reviewing the letter from the school board and other research, then developing a plan “within the next month.” Following lack of a motion on the land request, trustees eventually tabled a decision until more research could be done on the missing third agreement.

Before attending the Illinois Municipal Conference in Chicago Sept 15-17 with several trusteees, Kimmons prepared the agenda for the Sept. 19 Board meeting, at which time the Village had not yet received the requested written response from the school district. As a result, the matter was not included on the agenda for that meeting. It is, however, on the agenda for the Oct. 3 Village Board meeting, to be held in Village Hall at 6:30 p.m.

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