The City of Belgrade is ripe for a push towards pride in the community and overall economic health. Is a TIF the right move – only time will tell. There could be more emphasis on trails and sidewalks throughout the area – perhaps this could be a good way to get that moving.
The Belgrade City Council is exploring ways to boost economic activity, and it may come in the form of a new district that would overlay the downtown area and siphon property taxes to build infrastructure.
It’s called Tax Increment Financing, or TIF for short. The council has kicked around the idea for a few months, but Monday’s meeting brought the issue to the forefront. Bozeman’s economic development administrator Brit Fontenot explained the nuances of TIFs to the council.
In a nutshell, a TIF is a physical area where the city can use a portion of the property tax generated in the boundary for specific uses. A TIF does not increase property taxes, rather it diverts taxes associated with growth.A TIF is set up with a specific start and stop date of 15 years, according to state law. At the start date, a base tax amount is set on property within the district, which is what the city, schools and county will receive in taxes over the lifetime of the TIFF. Any taxes that accrue above the base amount are used on infrastructure within the district.
Bozeman has several TIFs in the city that diverts money to infrastructure uses, Fontenot said. For instance, downtown Bozeman is a TIF district.The idea is to form a TIF to overlay downtown Belgrade and perhaps more, city manager Ted Barkley said. The city is considering May as a start date.
“It needs to be a public process to frame the area,” he said. “We also need to bring the county and the school into the fold. Forming a TIF is not a difficult process but it impacts a lot of people.”The council is behind the push and sees TIFs as a way to boost economic development, Mayor Russ Nelson said.
A potential stumbling block is dealing with Montana Rail Link, Councilman Brad Cooper said. Nearly all of the land south of Main Street is owned by the railroad.
Forming TIFs is one of the few ways to fund infrastructure, Fontenot and Barkley told the council.“Infrastructure is economic development,” Fontenot said.
“Investing in infrastructure is one of the primary economic drivers.”
And using TIF funds can be diverse, Barkley said.“It all depends on what the district does,” he said. “You can do public projects like curbs, gutters and sidewalks to create a sense of place. Other projects can be specific to business like water and sewer line extensions.”
While public coffers may take a hit during the life of a TIF, the end goal would benefit everyone, Barkley said.“The increment of taxes diverted from the public does not include money just for the city,” he said.
“The county and the school will increase. When we invest money in a TIF district it increases the tax rolls.”
In other financial business, the council approved, on a split vote, a deal with local economic non-profits to manage the city’s Revolving Fund Loan. The fund has more than $1 million to issue loans to Belgrade businesses or start-ups that would provide more jobs in the city, according to city records. The city wants to open up the fund for a slightly broader scope to attract more businesses to town. But to do so would require bringing someone on board to market the fund.
The Northern Rocky Mountain Economic Development District and Prospera Business Network would manage and market the fund, according to city records. Northern Rocky Mountain would market, structure deals and gather information while Prospera would provide loan evaluations, closing and loan servicing.
The city is unable to aggressively shop the loan program around due to staffing woes, Barkley has said. Having a new management team could boost employment opportunities in and around the city, Mayor Russ Nelson said.
“The goal is to get it out of the mold and into the light,” he said.
But Councilmembers Anne Koentopp and Brad Cooper voted against the move. The pair worried handing the loan fund over would reduce city involvement and oversight.
Source: City mulls ways to boost economic activity | Municipal | belgrade-news.com