By Jan Schultz
The Imperial Republican
Not much enthusiasm was expressed at Monday’s city council meeting for a proposed tax increment financing (TIF) program that could enhance the downtown Imperial area.
While support was given by Imperial’s community development director Leslie Carlholm, three citizens spoke out against the effort at the meeting, and a letter from another was read, also against the proposal.
The proposal gained some initial interest from Mayor Dwight Coleman and the council at a meeting in May, when City Clerk/Administrator Jo Leyland visited with the council about it.
If established, the proposed “bucket” TIF effort could use funds diverted from the tax rolls to make both public and private business improvements in a specified area downtown.
When a TIF area is established, the tax dollar equivalent resulting from upward changes in the area’s valuation from new construction, redevelopment or reassessment can be “captured” and held in a fund for projects.
The proposed bucket TIF area would encompass from 8th St. south on Broadway to the Highway 6 intersection (by coop office), and include mostly residential areas one block east and west of that strip.
The additional tax funds gained from valuation increases within that TIF area could be collected for up to 15 years, and held in a “bucket” for improvements only in that same specified area, rather than go to the taxing entities such as the school district.
Leyland estimated the proposed bucket TIF project could generate about $190,000 over the 15 years.
Imperial’s Community Redevelopment Authority (CRA) would be the group to approve spending for any projects using the bucket TIF funds.
Mike Moreland, who owns two buildings in the affected area, said he was not enthusiastic about a bucket TIF effort. He sees it as an alternative tax.
He said by “tying up” these funds for 14 to 15 years, he believes the other taxing entities that would have gained those dollars will just raise their budget levies.
“It’s just another layer of taxation. I see no super benefits to the program,” he said.
It also sets up another group, he said, that needs to be overseen because it has the ability to distribute cash.
Carlholm said she sees the program as a way for businesses in the bucket TIF area to help preserve the investment in their business by helping some of the property owners who may be having some difficulties.
She also said the effect on other governmental entities would be minor and doesn’t believe she’d pay any more as a taxpayer.
“I feel it would be very beneficial to the community,” she said.
Merlin Prior said he is one of a number of business owners who has made investments in their downtown Imperial businesses without any assistance.
“I really think this is an encroachment on private enterprise,” he said.
He also said if the program isn’t done equally by making it available to all, it isn’t fair.
Noting they have been in business here since 1952, all of the investment in their businesses has been done personally, Prior said.
“I think it’s wrong to take tax dollars and go pick out particular people to help them and everybody else carries their own bag,” Prior said.
Leyland, who is a CRA board member, noted that the funds do not have to be provided for private businesses at all, but it is an option with a bucket TIF program.
In their preliminary discussions, she said the CRA has suggested possibly a 20 percent funding of private business improvements.
However, if funds were allotted to a private business, those improvements would have to be an improvement to the general area, such as a shared wall that might collapse and affect other buildings, Leyland added.
Projects such as sidewalks, new lighting downtown, benches or other decorative vegetation, as examples, could be public projects for which the bucket TIF could be earmarked.
Kelly Beard also expressed concerns with using the captured bucket TIF funds only in the downtown business area.
“I disagree with it,” he said.
Prior said if the city was going to help someone or the community, putting the money toward the new downtown sidewalks poured several years ago might have been a suggestion.
He said the property owners were billed for all of the sidewalks in front of their business even though some of it was on highway right-of-way.
A letter to the council from Bill Bauerle said the proposed bucket TIF was discussed at the last meeting of the Airport Authority, of which he is a member. There was no formal vote by the body, so Bauerle said he was submitting the letter as an individual only.
“It is in appropriate to divert collected taxes from other legitimate budgets for this use through the use of TIF,” he wrote.
“The concept of spending within one’s limits should be addressed. If the city is at or near its taxing limit, then it should readdress its spending allocation and remain within it statutory authority,” the letter continued.
“The concept of robbing Peter to pay Paul is inequitable and unfair to the taxpayers of the county. I urge rejection of this concept,” it concluded.
Council member John Arterburn asked if the bucket TIF project was needed since the city’s community development sales tax funds could be used for such projects.
“We already have that tax in place,” he said of the sales tax.
Leyland noted that, by law, in order to do any kind of TIF project, the city first had to have a study done to identify “blighted and substandard” areas. Five such areas were highlighted in the 2007 study of Imperial.
TIF-funded projects can only be done in those five identified areas, which are determined by age of buildings, availability of infrastructure, etc.
“This area being considered now is one of those (five) areas,” she said.
Monday’s discussion came during a public hearing on two resolutions dealing with the city’s General Redevelopment Plan and, secondly, setting up the bucket TIF area.
The council voted to table action on both resolutions so they have more time to consider them.
Mayor Coleman also encouraged the council to visit more with business owners in the area to get their thoughts.
Besides Leyland, other CRA members include Jim Pirog, Alex McNair, Russ Pankonin and Mary Deyle.
More on Monday’s two-and a-half-hour meeting will follow in next week’s issue.
Other council business
- Launy Ringleman will be serving as a new member of Imperial’s Board of Adjustment (variance board), replacing Ty Vetter who has moved from the community. The council approved Mayor Coleman’s appointment on a 4-0 vote.
- As city entities are near the start of new fiscal years, the council addressed a property tax request from the Imperial Airport Authority (AA) of $10,000 to support its 2012-13 budget. The request, same as last year, was approved 4-0. City Clerk/Administrator Jo Leyland noted the council does not approve their budget, but since the AA tax request part of the city’s levy authority, the tax dollar request must be approved.
- Labor Day, Sept. 3, would be a regular city council meeting night. Since it is a holiday and a quorum would not be reached, the council will not meet that night. However, they will gather for a special meeting on Monday, Aug. 13, starting at 5 p.m. for a budget work session. Leyland must have the 2012-13 city budget submitted to the state by Sept. 20.