The meeting featured two presentations: an annual update on Tax Increment Financing (TIF) by Jenny Wolf of PED, and an update on Community Development Block Grant (CDBG) and related HUD entitlement grants by Beth Elric, Grants Administrator. Council members posed detailed questions on mechanics, impacts, and policy considerations. No formal votes were taken.
Councilmember Bowie. Councilmember Coleman here. Councilmember Kim? Here. Councilmember Joes. Here. Councilman President Maker? Here. Chair Johnson. Here. All seven are present. All right. Thank you guys. So we have two presentations today. One on the tax increment financing, so TIFF, and then another on the community development block grant. So CDBG. And first up, I have Miss Wolf who will be presenting on TIFF as well. The presentations are attached as well for folks who are looking in. This is item number one for discussion. So thank you, Ms. Wolf, for making the time over to uh come across the street here to give us this presentation. We appreciate just you taking some of our questions in advance. Um I think we were able to cover quite a few things in our previous conversation, but just to preface, there were several um different topics that came up throughout the year last year as a part of the budget process. There was a TIFF district that was decertified last year, which prompted questions as well. So I was just wanting to and more insight when it came to just learning more about the process overall and the process after decertification. There's actually quite a few different things in here that I think will be not new information to our council members, but definitely good refreshers, especially for community members who may have been watching our TIFF presentations that we've now had every year since we've been here. But really, really excited to hear your presentation. Welcome, Miss Wolf. Oh, good morning, Chair Johnson, thank you, and members of the city council. Uh, my name is Jenny Wolf with PED. I will be presenting today on tax increment financing with annual update information. The summary of topics listed here is all included in my slides, but many uh will be very brief as they have been included in prior presentations. For example, what is TIFF? TIFF is authorized by state law and enables the HRA to capture the increased taxes to finance development that otherwise would not occur. Here is an illustration from the State Department of Revenue that I like to use as a classic example of TIFF. It demonstrates that when properties have declining values due to blighting factors and disinvestment, the taxing jurisdictions will benefit from a stabilized taxable value, creating a steady revenue stream, and then they'll realize the gain when the TIFF district expires, increasing the overall tax base. How does TIFF work? At a high level, when a new TIFF district is certified by the county, they set the original market value tax capacity that will be fixed for the taxing jurisdictions, and then they calculate the increased tax capacity each year and remit the distribution of the taxes from the increased value to the TIFF authority. The taxes from the value in place prior to the creation of the TIFF district will continue to be sent to the taxing jurisdictions. The local tax capacity based taxes from the increased value will be sent to the TIFF authority. And in the case of the HRA or the port authority, all property taxes generated from other tax levies would be sent to the applicable taxing jurisdictions on the full value of the development, which includes market value-based taxes for the school district and state levied taxes for commercial properties. This slide includes illustrations from the Office of the State Auditor reflecting the full payment of taxes by TIFF properties and the purpose of capturing the increased taxes to pay the eligible costs that enabled the development to occur. And this slide shows a graphical depiction of the distribution of an annual tax payment. And this is an actual, this is actually the proposed uh TIFF district graphic. So this reflects a housing only project, so there isn't any commercial taxes, and it uh reflects a pledge of 65% of the collected tax increments to cover the eligible costs, enabling the development to occur. And this is approximately 53%. You can see a little over half of the pie of the total tax payment, which is the lighter blue slice, and then the remaining 35% of the collected tax increments are for admin and pooling for affordable housing, and this equates to an additional 28% of the tax payment, and that is 8% in the orange slice for admin and 20% in the gray slice for affordable housing. This leaves 19% of the tax payment that is remitted to taxing jurisdictions. That's the darker blue slice. Reflect in the bar chart, the large distribution of market value-based taxes to the school district in the green bar, which in this case reflects an amount 16 times greater than without the creation of the TIFF district.