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City of Mounds View Comprehensive Plan ________________________________________________________________________ Chapter 9: Implementation 9-6 The CIP is more than a plan as it also represents the City’s tentative commitment to meet the plan unless circumstances or priorities change. The City’s commitment is more certain in the first year of the CIP and becomes increasingly more tenuous in later years. One should think of the CIP as the City’s present plan and priority for improvements over the next five years. Even though the CIP represents a tentative commitment, the adoption of the CIP does not authorize the construction of projects or improvements since the City must follow state statutes and the City policies to authorize expenditures. This program implements the plan by identifying the necessary funding for short-range infrastructure and capital improvement projects. Tax Increment Financing Tax Increment Financing (TIF) is a funding technique that takes advantage of development or redevelopment to pay public development or redevelopment costs. The tax increment is the difference in tax capacity and tax revenues generated after development has occurred compared with the tax capacity and tax revenues that the property was generating before the new development. The City then uses this “captured value” to repay the public costs that are eligible expenditures (acquiring property, removing old structures, site and utility improvements). It has been the general philosophy of Mounds View to use the “pay as you go” approach for assisting a development through tax increment financing. With this approach, the City limits its financial risk by reimbursing the developer for the agreed upon and eligible project costs after the developer has completed the project. This policy ensures that new construction will generate the increments and the City does not issue bonds for financing a project. TIF is an implementation device for economic development and redevelopment. Fiscal Considerations The implementation of the plan will require the City’s financial commitment and support to carry out the policies and to achieve the City’s goals. These financial commitments include existing programs and policies the City now has in place. It is the intent of the City to administer this plan with available financial resources. It is important to note that the City may need to set aside money in future budgets to carry out some of the recommended actions. The approval of the Comprehensive Plan does not authorize expenditures for implementation. The City Council may authorize the financial resources to implement the plan in accordance with state statutes and city policies. Funding also may be available from outside sources. When opportunities become available and make sense financially, the City should seek funds through grants, loans and other financial resources.