TIF QUESTION - Why is TIF #5 sharing revenue with TIF #1?

During the public information meeting on Monday night regarding the Boca Grande project, there was some discussion, and perhaps some confusion, over the current situation involving TIF #5 (the Alliance Laundry warehouse district on Stanton Street) and TIF #1 (the original downtown TIF). Under state law, a TIF must be closed if no uses for the revenue can be found. A TIF can share its revenue with other districts if the council approves a resolution to do so.

On September 11, 2008, the Plan Commission unanimously approved the project plan and resolution to amend TIF District #5 to allow for sharing revenue with TIF District #1. On September 28th, the Council unanimously approved the resolution, and TIF #5 began sharing its revenue with TIF #1 in 2009.

In the 2009 budget, TIF #5 is projected to bring in $151,240 in increment. The district has no debt to pay off. TIF #1 is projected to bring in $189,780 this year, and spend about $11,200 for its audit and community promotion. The TIF is also paying off roughly $157,000 in debt. Under the current payment schedule, the downtown TIF will make its last debt payment in 2012.

By sharing the revenue from TIF #5 with the downtown TIF, we are able to fund the Blackburn Street Parking lot reconstruction AND close the TIF one year earlier (2011), putting millions of dollars of property values back on the general tax roll. Please note, when a city closes a TIF, it does not mean it can spend additional money above and beyond the state-imposed levy limits. It does mean that additional money will go to the school district, county, state and technical colleges. It will also increase the total property base of the city, which, in theory, means, IF the city keeps its mill rate level, a homeowner would see a slight decrease in their tax bill.

The council made the decision to share the district's revenue, because it felt the benefit of doing the parking lot and closing the downtown TIF early outweighed closing TIF #5. This is the same concept which is being used in the proposal to share TIF #5 revenue, after 2011, with the new proposed downtown TIF #11.

If you have more questions on this issue, which is a bit convoluted, but I am trying my best to explain it, please email or contact me, or post a question on the blog.