Downtown TIF district explained
I was sifting through meeting minutes today, and thought I'd post this update on the downtown TIF district. It's from last week's finance and labor relations meeting minutes:
TID #5 Audit.City Administrator Dan Wietecha said the statutory audit for Tax Increment District #5 had been completed through December 31, 2009. Except for the East Main Street Bridge, all infrastructure items identified in the September 2005 project plan have been completed. A comparison of actual expenditures versus the project plan leaves some $400,000 available for additional projects; the $85,000 budgeted for the bridge would reduce this.
The district has $3.9 million in debt to be repaid by tax increment collections over the life of the district, expiring in 2031. At a current collection around $150,000 per year, the debt would not be fully paid until 2035. Appreciation in the value of properties throughout the district would increase the amount collected in each year and accelerate the repayment. Such appreciation is anticipated over the life of the district, especially with the improvements to the downtown infrastructure, but is difficult to predict with the current real estate market.
Wietecha noted that project plan could be modified in the future. He emphasized that the limited financing available requires any project undertaken must be a priority. Further, any direct assistance to an individual business should continue to have safeguards to ensure collection of the full amount of the loan even if tax increments fall short. The Committee noted that it did not want to deter businesses from applying for assistance.