City Council Meeting
Lisa A. Kuss
City Administrator
May 10, 2011
What is Tax Increment Financing?
 Wisconsin’s principal economic development
financing tool for local governments
 Program created by legislature in 1975
2
Current Statistics
§ Beginning of 2009, 1,074 active TIDs (includes 2008
submissions)
§ Equalized Incremental value grew 16% (up 1 ½%)
3
Eligible Project Costs
§
§
§
§
§
Public works &
improvements
Financing costs
Real property assembly
costs (land write-down)
Professional service costs
Administrative costs
§
§
§
§
§
Relocation costs
Organizational costs
Pro-rated costs of utility
infrastructure
Cash grants (requires
developer agreement)
Environmental
remediation
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PROPERTY TAXES
5
PROPERTY TAXES-TID BASE VALUE
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TWO PIES-ONE TAX BILL
Base $50,000
Increment $750,000
FROZEN PIE
NEW PIE BAKING FOR UP TO 26 YEARS
Total Tax Value $800,000 Value, $28 Mill Rate
Total Tax Bill $22,400…..Pie One $1,400…Pie Two $21,000
City Spent Money to Build Road, Install Utilities, Development Incentive Payment
Funds are Divided When Taxes Are Paid
Tax Increment Financing –
How itTheWorks
TIF receives taxes on
Property Value
the increment value at the
combined rate of all taxing
entities.
TIF
Total
All Taxing Jurisdictions
continue to receive their
share of the tax levy on the
base value.
Local
County
School
VTAE
Total
Mil Rate
20.00
20.00
Mil Rate
5.00
3.50
9.50
2.00
20.00
Increment
Value
Base Value
Time
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Clintonville TIF
 City of Clintonville
 Active TIDs and Year of Creation
 TID 3 Industrial Park (1992)
 TID 4 Highway 45 Commercial and MultiFamily (1994)
 TID 5 Angelus Retirement Community (2002)
 TID 6/7 (2003/2005) Seagrave Fire Apparatus
 RETIRED TIFs #1, City Hall/Downtown
#2 Morning Glory Dr. Cul de Sacs
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TID 3
Created 1992, Max Termination 2018
Projected Termination 2016
Expenditure Period Ends 2014
Industrial
Park
Base Value
$933,300
Increment Value
1992-2009 Added
$20,939,100
TOTAL
EQUALIZED
VALUE
$21,872,400
Total Expense $4,964,227
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TID 3
Klein Coating
Jepson Trucking
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TID 3
Specialized Products
Specialized Products
Addition
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14
15
TID Values
TID 4 Commercial/Multi-Family
TID 5 Angelus Retirement
 EQUALIZED VALUE
 EQUALIZED VALUE
Base $253,700
Increment $2,254,600
Total $2,508,300
TOTAL EXPENDITURES
$926,920
Created 1994, Expenses End
2016
Max. Termination 2020,
Projected Termination2018
Base $0 TAX EXEMPT HOSPITAL
Increment $5,584,100
Total $5,584,100
TOTAL EXPENDITURES
$1,988,799
Created 2002
Max Term 2028,
Projected 2016
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TID #5
Angelus…Old Hospital Transformed
City Investment $1.9 million Tax Value Increase $5.5 million
17
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TID Values
TID 6/7 Seagrave Fire Apparatus
 EQUALIZED VALUE
Base $1,982,700
Increment $3,345,200
Total $5,327,900
TOTAL EXPENDITURES
$1,812,926
Created 2004
Max. Term 2030,
Projected 2023
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The “But For” Test
§ Key component of the TIF program is referred to as
the “but for” test
 “But for” the use of TIF, the proposed development
would not occur:



as proposed
within the same time frame
with the same level of value
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How is a TID Created or Approved?
Joint Review Board Reps
Entity creating the TID, Includes Reps From
 School District
 City
 County
 Technical College
 Public Member (appointment must be approved by
majority vote of other members)
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Final Approval
§ Final authority to allow creation or amendment of a
TID is vested in the JRB
 Majority vote
 To approve creation or amendment of a TID, JRB must
find that the criteria set forth in Wisconsin Statutes
66.1105(4m)(c)1. are met
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TID Boundaries
§ District Boundary Tests
 Parcels must be contiguous
 Equalized valuation test

the value of any current TID increments plus the base value of
the proposed district may not exceed 12% of the total value of
the community. SO YOUR COMMUNITY CANNOT ALL BE
IN A TIF
 Must also meet applicable test for type of District to be
created:
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Maximum Life
§ A District may remain open until the earliest of
the following occurrences –
 The District’s maximum life is reached, which varies by
type of District and when it was created (26 years norm)
 When total tax increments collected are sufficient to pay
all of the District’s project obligations
 When the City or Village passes a resolution to close the
District (any unreimbursed project costs become a
general liability of the municipality)
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Eligible Project Costs
§ As of March 18, 2008, Wis. Act 57 took effect allowing
otherwise eligible project costs to be undertaken
outside a TID provided:
 The project location is within ½ mile of the TID
boundary
 The project location is within the city or village
 The JRB has approved the project
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Amendments
§ Boundary Amendment
 Limit of 4 allowed during life of district
 May add and/or subtract property
 Must be in compliance with 12% test to add territory to a
district
§ Project Plan Amendment
 No limit to number allowed (except maximum
expenditure period)
 Used to amend list of TIF-eligible projects to be
undertaken
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Questions?
Any
Questions?
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