At Monday night’s Park Ridge City Council Committee of the Whole meeting, the Council got further confirmation – as if even the most hapless alderman needed it by now – that the Uptown TIF could remain a money-sucking albatross around the City’s neck for the remainder of its 23-year life.

Or for another 13 years, to be exact.  Assuming it’s not extended.

That was the word from the City’s outside TIF consultants, Kane McKenna and Associates, who told the City that by May 1 of next year the City’s TIF Fund will be in hock to the City’s General Fund by about $6 million.  While one fund owing another a boxcar number might sound like the creative accounting and mumbo-jumbo that comes out of Washington D.C. when discussing the federal government owing hundreds of billions of dollars to “Social Security” for loans that the SS “trust fund” made to keep the government operating, it’s real dollars to us average taxpayers.

The problem is a simple one: back in 2003, then-mayor Ron Wietecha and a recklessly “motivated” City Council borrowed and spent way too much on the Uptown TIF District Redevelopment project – selling themselves on the pie-in-the-sky revenue projections provided by the developer, PRC Partners; by our disingenuous then-city manager, Tim Schuenke; and by local realtors and retailers, many of whom were hoping the project would give their own businesses the jump-start they were desperately looking for.  Oh, and maybe some local real estate speculators, who saw the new project as a way to goose up the values of neighboring property and scalp a quick profit.

Kind of like those speculators who were buying up or optioning all that land in and around the expected venues for the “guaranteed” Chicago 2016 Olympics.

Compounding the problem of those ridiculous revenue projections is the strong possibility that the City sold off the City land on which the bulk of the project sits – the old reservoir block – for as much as two or three million dollars less than it was worth.  That’s because our irresponsible public officials were so consumed with getting the project done that they threw caution (and/or common sense) to the wind, and didn’t even get the property appraised.

Brilliant!

The City then undertook a lot of infrastructure expenses in furtherance of the project, and as a favor to the private developer.  It issued a bunch of long-term bonded debt and pledged all the City’s assets as security for that debt.

For the first few years the TIF bumbled along with nobody paying close attention or publicizing its performance – because then-Deputy City Mgr. Juliana Maller, who nominally was in charge of keeping track of the TIF, was clueless and uninterested; and because reliable information was next to impossible to come by, probably because such information would have become increasingly embarrassing for the culprits still sitting around The Horseshoe and harboring further political (or commercial?) ambitions.

Not until Allison Stutts became Finance Director and took over TIF analysis from Maller did Mayor Dave Schmidt and the new Council start to get some of the unhappy totals – and it became increasingly apparent that the City needed some TIF experts to advise if anything could be done to improve the situation by refinancing or other creative tactics.

According to Page 16 of the Kane McKenna report (which also is available on the City’s website under the 01.11.13 City Council meeting attachments), the City currently is on the hook for over $39 million in additional TIF debt service.  But that’s far from the worst part of the report.

On that same page, in that same table, Kane McKenna forecasts three separate alternate scenarios, with the best one projecting that the TIF will end up costing the City $7.4 million.  The worst case scenario: The TIF ends up $27 million in the in the hole.  And, as the consultants note: “The imbalance between TIF revenues and obligations…is significant”; and none of their suggested action plans is “a complete remedy.”

If you watch Monday night’s City Council COW meeting video on the City’s website, you will hear the Kane McKenna representative discuss how these scenarios were drawn up with a conservative underlying premise of no growth in sales and property tax revenues, which is unlikely.  But even building in an equally unlikely 4% annual growth in such revenues, the deficit in the “special” TIF fund could still end up at $10 million or so, to go along with the locked-in $7.35 million cumulative obligation to the school districts and the Park District under all three alternative scenarios.

Fortunately for all the perpetrators of this goat rodeo but one (current Ald. Rich DiPietro), these revelations come when they no longer are public officials.  And if you ask them about how they could have been so wrong about this project – for which they were planning on as much as a $20 million-plus profit by the expiration of the TIF’s 23-year term – you can expect more songs and dances than the original Broadway production of “Cats.”

But the bottom line, especially as we move into the final months of the mayoral and City Council races, is that it looks like the TIF will continue to be a major drain on City finances for the foreseeable future, the proverbial 500 lb gorilla sitting in the corner of the City Council chambers at every meeting.  We therefore encourage all taxpayers/voters to press all the candidates for City office on how they view this problem, and demand specific answers about what they intend to do to address it.

Mindless, pie-in-the-sky irresponsibility by City officials brought us to this place.  Does anybody but the village idiot(s) think more mindless pie-in-the-sky irresponsibility will get us out of it?

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