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TIF Updates

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This presentation provides a history of tax incremental financing in Wisconsin, trends in its use, recent changes and best practices in using TIF for community development.

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TIF Updates

  1. 1. TIF Update Wisconsin Clerks, Treasurers & Finance Officers Institute June 27, 2013
  2. 2. Overview 1. Your TIF Questions 2. Past & Current Use of TIF 3. Recent Changes 4. Issues & Discussion
  3. 3. What Is TIF? Simply: A municipal financing tool to accomplish specific community development objectives: • Blight Elimination • Neighborhood Conservation • Industrial Development • Mixed-Use Development
  4. 4. Past & Current Use of TIF TID Type # Active % TIDs pre-10/1/95 213 18.7% Blight 268 23.5% Rehab/Cons 101 8.9% Industrial post ‘95 193 16.9% Industrial post ’04 77 6.8% Mixed Use (‘04) 203 17.8% Environmental 16 1.4% Town Ag 3 0.3% Total 1,074 Severely 9 0.8% Distressed Distressed 56 4.9% 1995 – 835 TIDS Created, 408 were still active
  5. 5. Trends In Use of TIF Statewide, about 4.8% of municipal equalized value is tax incremental value, up from 3% in 1990.
  6. 6. TID Matrix
  7. 7. Recent Changes Fees: • Creation: $1,000 • Amendment (addition or subtraction): $1,000 • Amendment (addition and subtraction – same TID): $2000 • Amendment (distressed/severely distressed): $500 • Project Plan (only) Amendment (no added/ subtracted territory): no fee. • Yearly maintenance fee: $150 per active TID, payable by May 15th. • Electronic payment
  8. 8. Recent Changes New Filing Deadline • Submission deadline of October 31 of year in which TID was created – previously December 31 Options for 12% Non-Compliance • DOR notification by 12/31 • Local legislative body may, within 30 days: • Rescind approval of project plan resolution, or • Remove parcels from district and resubmit • Simultaneous creation/subtraction • 2 appraisals showing values for each action
  9. 9. Recent Changes Sharing Revenue Between Districts (Allocation Amendment): • Same overlying taxing jurisdictions • Demonstrate surplus revenue • TIDs created after 10/1/95: • Recipient must be blight elimination or neighborhood conservation TID, or • Recipient TID must have projects to create, provide or rehab low-cost housing or remediate environmental contamination • Donor TID life cannot be extended
  10. 10. Recent Changes Distressed/Severely Distressed TID • TIDs created before 10/1/08, no amendment after 10/1/09 • Distressed designation allows a max10 year extension • Severely distressed – value increment decline >25%- designation allows a max 40 year extension • May not add new project costs • No overlapping TID • Expend funds outside TID boundary • Add territory • Be a donor district
  11. 11. Recent Changes Mixed-Use TID • >50% a combination of commercial, industrial or residential development • <35% of TID may be newly platted residential • TID expenditures may be made for residential and >25% vacant land allowed if one of the following applies: • Density at least 3 units per acre • Housing located in a conservation subdivision • Housing located in a traditional neighborhood development
  12. 12. Recent Changes Expenditures Within ½ Mile • Remain within municipal boundary • Project costs must still relate to the purpose for which the TID was created • Does not capture increment
  13. 13. Recent Changes Extension for Affordable Housing • TIDs that have paid off all project costs may extend the life of the district for one year to benefit affordable housing and improve the housing stock. • At least 75% of increments must be used for affordable housing and up to 25% to improve housing stock. • City resolution forwarded to DOR – no JRB action or public hearing required
  14. 14. Recent Changes Town TIF – Cooperative Boundary Agreement • Towns that have a cooperative boundary agreement with a city/village may create a full-featured TID if: • All or part of the town will be annexed • City/village annexing approves the creation of the TID • TID is located solely within the territory to be annexed • City/Village may take over a Town TID until its maximum life has been reached
  15. 15. Recent Changes Multi-Jurisdictional TID • Two or more municipalities may enter into an intergovernmental cooperation agreement and jointly create a multi-jurisdictional TID • Agreement determines municipality with lead role • Increments and expenditures allocated to each jurisdiction • Towns not allowed to participate in a multi-jurisdictional TID
  16. 16. Example: Sharing Revenue Prairie du Chien TID #5 Workforce Housing – transfer funds from ind TID to ind TID for low-cost housing – City is developer – energy star homes – bike connection to high school High School Bike Trail Universial Forest Products 100 Emp. 37 Single Family Lots
  17. 17. Example: ½ Mile Radius Shorewood Hills Marshall Court
  18. 18. Example: ½ Mile Radius Shorewood Hills Marshall Court Before After
  19. 19. Example: ½ Mile Radius Cambridge Vacant Melster Candy Property • “Hole in the donut along Koshkonong Creek • Senior housing redevelopment proposal • No bridge connection to downtown - creates a divided community from a pedestrian perspective • No community connections to regional bike trails
  20. 20. Example: ½ Mile Radius Cambridge • TID driven by redevelopment of Melster Candy site • Connect site & west side with downtown • Connect regional bike trails Connection to Glacial Drumlin Trail Safe bike crossings of Hwys 12 & 18 • ½ mile radius Existing Cam-Rock Trail
  21. 21. Example: Extend for Housing Monona • Housing stock – 1950’s; not meeting needs of modern households • Losing residents to communities w/ newer homes • TID #3 closing – generating $120,000 • Kept TID open 1 year – revenue used to fund Renew Monona
  22. 22. Example: Intergovernmental • Town Cooperative Boundary TID • Multi-Jurisdictional TID
  23. 23. Issues & Discussion • Annual Filings: • TID Assessment Report • Assessor/2nd Monday in June • Missed Deadline=Missed Increment • Statement of Assessment • Clerk/10 Days after Board of Review • Tax Increment Certification • Clerk/May 15 • Missed Deadline=Missed Increment
  24. 24. Issues & Discussion • Annual Reports • Provided to Overlying Taxing Jurisdictions – Not to DOR • May 1st Deadline • Status of Each TID Including Expenditures & Revenues • Sample Form: http://www.revenue.wi.gov/forms/govtif/pe-218.pdf
  25. 25. Issues & Discussion • Periodic Filings: • Audit Reports • 3 Required – 12 Months After: • 30% of Project Costs Expended • Final Expenditure • Termination • Only Termination Audit Filed With DOR – All Others Sent to Overlying Taxing Jurisdictions
  26. 26. Issues & Discussion • Periodic Filings: • Development Agreements • If JRB Not Dissolved, Copies Must Be Sent To JRB, Otherwise Retained By Municipality • Not Sent to DOR
  27. 27. Issues & Discussion • Good Practices • Annual Review w/ Governing Body • TIF Overview Every 2 Years • Case Studies of TIF Projects • TIF Role In Implementing Strategic Development Objectives
  28. 28. Resources • DOR City/Village TIF Manual http://www.revenue.wi.gov/pubs/slf/tif/cvmanual.html • TID Criteria Matrix http://www.revenue.wi.gov/pubs/slf/tif/tif-trix.pdf • Sign-up for email updates http://www.revenue.wi.gov/html/lists.html • This presentation available for download from our blog – sign up while you’re there! http://blog.vierbicher.com
  29. 29. Questions? Gary Becker, CEcD Vierbicher 999 Fourier Dr., Suite 201 Madison, WI 53717 (608) 821-3941 gbec@vierbicher.com www.vierbicher.com

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