University Park undergoing audit for alleged abuses of TIF funds
The FBI is investigating an alleged pattern of misappropriation of funds in University Park that has left the village saddled with mounds of massive debt.
According to the Chicago Tribune, village leaders for years have shifted tax increment finance (TIF) resources into the village's general fund, all in an effort to cover budget shortfalls soaring into the millions.
The end result of the transfers has now left the village of 7,000 facing a massive TIF debt load that not many could have imagined.
Though municipalities regularly turn to TIF districts to spur development in areas that may not otherwise be attractive to outside investment, critics charge University Park officials have gone above and beyond what’s generally accepted, using the funds for such matters as payroll and police, fire and public works operations.
The Tribune adds all the trouble came to light after new Village Manager John Pate hired forensic auditing firm IRH Development to scour the village’s finances. A preliminary report released earlier this month has since concluded that the village used at least $26 million, or approximately three times the village's annual revenues, in TIF funds for non-TIF-related purposes over a four-year period commencing in 2012.
In addition, IRH found that another $7 million remains unaccounted for. In all, the village is reported to be more than $17 million behind in reimbursements to businesses operating in two TIF districts, with IRH adding that all, or at least most of it, stems from improper TIF expenditures.
Pate added all the shifting of funds from one account to another essentially means none of the village’s past balanced budgets were really balanced at all.
"What balanced those budgets was either a $1.5 million or $2.5 million loan being taken out of the TIFs to balance the general budgets,” he told the Tribune. "But as we discovered two years ago, that is improper financial management and that's not the proper use of TIF funds."
Pate said doing all he can to get University Park’s finances in order is all part of his plan to usher in a new era of fiscal responsibility and government accountability.
While Pate has expressed optimism about what he views as the village’s eventual ability to bounce back, he maintains the first order of business has to be determining just how much the village truly owes. IRH’s responsibilities include conducting forensic audits of multiple village funds.
"The village has been living beyond their means for quite some time," Pate said, comparing the extravagance to "living on a caviar diet with a bologna budget."
Meanwhile, the state’s inspector general recently subpoenaed village records related to a former village official.
In addition, Pate’s predecessor, Johnna Townsend, recently told the Tribune she would “not be surprised” to learn the village was under federal investigation.
Pate maintains he has no contact with federal agents since assuming office but admits his computer is one of the ones federal agents have the scanned over the last year.
No charges have been filed against any village official or employee, and Pate insists he plans to share the findings of the village's forensic audit with federal investigators once it is completed around springtime.