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TIF debt reduced in City of Tiffin

TIFFIN– Cleaning up Tiffin’s financial recordkeeping has uncovered a pleasant surprise.
With the city council’s approval of the Dec. 1 TIF filing, the City of Tiffin will carry a lower level of Tax Increment Finance (TIF) debt than reported in years past.
Tim Long served as Tiffin’s interim city manager from February to May 2015, and stayed on part-time to work in tandem with new Tiffin City Administrator Doug Boldt. Long’s primary duties centered on organizing the city’s financial documents and creating a clear, consistent method of communicating the city’s financial position to its elected officials.
Long has incrementally accomplished both those tasks over the past several months. At the council’s Nov. 25 meeting, in seeking approval of Fiscal Year 2017’s TIF Debt Certification, Long was able to provide the council with good news.
“The amount we are requesting is a fraction of the amount of TIF dollars that could be available,” Long told the council.
Under Iowa’s Urban Renewal laws, TIF is a state-legislated method that allows cities to use the increased tax revenues generated by newly-developed properties to pay for infrastructure and to incentivize economic development projects. A city must report the amount of TIF proceeds it has obligated– i.e., the amount of its annual “TIF debt”– as well as its TIF revenues and expenditures, with the State Department of Management and the county auditor each year.
Long reported having several meetings with the Johnson County Auditor’s Office beginning last spring, and numerous telephone conversations with auditor officials and other TIF experts to clear up previous documentation that has proven confusing and inexact when it came to Tiffin’s certified TIF debt.
After a long and arduous process, Long reported last week that Tiffin will request TIF receipts in the amount of $855,783 for Fiscal Year 2016-2017. The amount will cover the year’s payments for two annual appropriation bonds, as well as tax rebates to expanding businesses Big Country Seeds and Hart Family Dentistry.
In addition, Long recommended de-certifying $15.9 million of previously-certified debt, which included duplicate certifications and standing certifications dating back to 2004 for projects already completed, and re-certifying the city’s actual current TIF debt, which totals $10,224,816.
The clarification means Tiffin is not using nearly as much of its TIF debt capacity as it could, Long noted.
“The amount we are requesting is a fraction of the amount of TIF dollars that could be available to us,” Long said. Tiffin currently has about $1.725 million available annually, if the city chose to use it.
“So our percentages look a lot better,” said council member Peggy Upton. “(Previously), the concern was the amount of TIF we were taking three, four or five years ago was excessive.”
In recent years, members of the Johnson County Board of Supervisors and local school district officials have criticized cities for using excessive amounts of TIF funding. When cities use Urban Renewal Districts, 100 percent of the incremental property tax revenue is captured by the cities for a designated time period, and does not have to be shared with other taxing entities like the county and school districts. It causes those governments to lose out on potential tax revenues that could provide services to citizens, critics say.
And while much land within Tiffin’s municipal boundaries is designated as Urban Renewal, city officials were pleased with the new numbers in Long’s report.
“It shows we take using TIF seriously, and that if an issue comes up where we do need to use TIF in a responsible way, we don’t look like we are constantly spending every penny (available),” said council member Mike Ryan.
“And that shows progress,” Upton said.
Mayor Steve Berner agreed, noting that the city has been able to knock several major projects off its Capital Improvements Plan in recent years without having to raise city taxes. The current tax rate is $11.80 per $100,000 of assessed value, lower than the $11.97 rate of fiscal year 2014-2015.
“We are still getting stuff done, and haven’t touched our tax levy,” Berner concluded.