City moving ahead with TIF district
<p>Improvements to a TIF district, like the recent remodeling work by Xanterra Parks & Recreation, increase the overall tax valuation of the district. The additional tax revenue generated after a TIF district is created would go into a special fund for projects designated in advance.</p>
The public process to create a tax-increment financing (TIF) district in Columbia Falls to help address blight and fund redevelopment moved a step closer last week.
The Columbia Falls City Council unanimously agreed at their Sept. 15 meeting to hire a consultant to guide the city through the process. The contract with Community Development Services of Montana and principal Janet Cornish is capped at $25,000.
“I have met Janet Cornish at state-wide meetings, and I have talked with several other cities that have used her services,” city manager Susan Nicosia told the council. “She comes highly recommended.”
The city council provided for the TIF district process in their budget, and it’s on the city council goal list.
“We’ve talked about this since 1999,” Nicosia said. “Now is the time to do it before the legislature changes the law.”
The Montana Legislature provided for TIF districts in 1974. Once local voters approve the creation of a TIF district in their city, increases in property tax revenue in the district over the base year is diverted to a special fund devoted to redevelopment and civic improvement projects, instead of going to the general fund or other taxing jurisdictions.
Property values in a TIF district will increase over time as empty lots are filled, large lots are subdivided, buildings are remodeled, expanded or replaced, and city infrastructure improvements are made. Future TIF revenue can be put to use right away by using tax-increment bonds.
The city of Whitefish adopted a TIF district in 1987 that identified blight across most of the city as a deterrent to redevelopment. It will sunset in 2020.
To date, Whitefish has used $29.7 million in TIF money to rebuild streets, purchase land for city parks and facilities, create parking lots, improve city infrastructure, build bike paths and footbridges and reconstruct City Beach.
Important Whitefish TIF projects include acquiring Depot Park downtown, partially funding the skateboard park, ice-skating rink and WAVE Fitness Center, constructing a parks maintenance building and an Emergency Services Center, and future construction of a new City Hall.
In addition to an effective TIF district, the city of Whitefish benefits from a 2 percent resort tax. A resort tax wouldn’t work well in Columbia Falls, which lacks the lodging, restaurants and specialty stores that Whitefish has, Nicosia said.
About a dozen years ago, the Montana Department of Revenue estimated that Columbia Falls could make about $7,500 per year from a resort tax, she said. The cost of holding an election to establish a resort tax here would be about $4,000, she added.
According to the consulting contract, Community Development Services would be responsible for initial training and orientation sessions, holding public meetings, educating property owners, identifying the TIF district boundaries, preparing a statement of blight, and assisting in amending local land-use regulations.
City staff and councilors would participate and assist throughout the public process. The goal is to have the TIF district ordinance in effect by Dec. 31, 2015.