08-08-2007 Council Agenda - Laserfiche WebLink

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HOW INCREMENT MAY BE USED Eligible Uses In addition to the specific limitations for each type of TIF District, tax increment may be spent only for specified purposes permitted in the underlying development statutes. Such purposes generally include: • • land acquisition; site improvements; public and on -site utilities; demolition; relocation; and, administration. If the authority owns a Project, increment may be used to finance essentially any aspect of the Project. Because the development statutes are often ambiguous, whether a particular activity is TIF- eligible may depend on the facts in each case. Administrative Expense Administrative expenditures are limited to 10% of the expenditures authorized in the TIF Plan, or 10% of actual increment expenditures, whichever is less. They are defined to mean all expenditures of the authority other than land acquisition and relocation costs and costs "directly connected with the physical development of the real property in the district." The County auditor may assess each TIF district for the county's costs of administrating the district, and the fee may be paid from tax increment. General Government Use Increment may not be used to finance buildings that are used "primarily and regularly for conducting the business" of any unit of government, except for parking structures, a commons area used as a public park, or a facility used for social, recreational or conference purposes. If a TIF - financed social, recreational or conference facility is operated by an entity other than the authority, the authority's governing body must approve operating policies for the facility. This would apply, for example, when an HRA finances a city community center. Guaranty Fund An authority may establish a guaranty fund to indemnity a person for liability for remediation costs under state or federal environmental law. The maximum team of the indemnity is 25 years, and the maximum amount is one -half of the remediation costs. The authority may deposit tax increments in the fund, and the municipality may also appropriate money for deposit in the fund. Ehlers & Associates, Inc. - TIF Basics 7