10-28-2015 Council Packet - Laserfiche WebLink

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HOW TO SET UP A TAX INCREMENT DISTRICT TIF Plan The use of increment must be spelled out in a TIF Plan approved by the City Council (or county board for a county I -IRA) after public hearing, with 30 -day notice to the County and School District including the proposed plan and estimated fiscal implications, a published hearing notice with maps between 10 to 30 days from the hearing date, and review by the planning commission. The TIF Plan must include a statement of objectives, list of property to be acquired, a list of proposed development activities, identification of property to be included in the district, and a list of supporting studies and reports. In addition, the plan must include estimates of the costs associated with the project, sources of revenue, amount of bonded indebtedness, most recent net tax capacity of property within the district, estimate of captured net tax capacity upon completion, duration of the district and impact on other taxing jurisdictions, When approving the TIF Plan, the Council or Board must find (among other things) that the proposed development would not reasonably be expected to occur solely through private investment in the reasonably foreseeable future (the "but for" finding), TIF Plans may be modified using the same process as for approval of the initial plan. Generally, modifications that do not increase expenditures or debt or call for new land acquisition may be approved simply by resolution. Modifications will not trigger application of current statutes unless the boundary of the TIF district is expanded. County Commissioner Notice For housing and redevelopment districts, the county commissioner who represents the area of the TIF district must be notified at least 30 days before the date of publication of the public hearing notice, The "But For" Test Under a 1995 legislative change, the municipality must find that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing (a hypothetical figure) would be less than the increase in the market value of the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the TIF Plan (this requirement does not apply to qualified housing districts). Example: If the development is estimated to add $500,000 in value, and the present value of the maximum stream of increment at an assumed discount rate is $300,000, the municipality must find that no other development would add more than $200,000 in market value at this site, Ehlers & Associates, Inc.. TIF Basics 6