TIFs bring more to city coffers

CELINA - The nine tax increment finance (TIF) districts established in Celina several years ago have generated nearly $2 million and allowed the city to pursue multiple public infrastructure projects.

A TIF is a program established to divert property taxes on new development - including property value appreciation on all parcels of residential, commercial and industrial ground - into separate accounts to fund infrastructure and other public improvements in a specific area.

In 2004, the city created six multi-parcel TIF districts - Grand Lake, Mersman, Havemann Road, Staeger Road, State Route 703 and State Route 29 West, according to Celina Planning and Community Development Director Kent Bryan.

Another multi-parcel TIF - Market Street - was established in 2005 and two individual property TIFs - Thiemann and Kriegel - were developed in 2006.

All were strategically placed based on city needs, according to Bryan.

Since 2004, Celina's TIFs have generated $1.96 million. If those TIFs did not exist, only $117,446.19 would have been generated on the same property, according to estimates by Bryan.

The TIFs are projected to bring in $685,451 in 2010. Without them, only $43,290 would be generated and put in the city's general fund, according to Bryan.

Without a TIF, the school district collects about 73 percent of property taxes on new development, while the city only gets 4.78 percent, according to Bryan.

When active, a TIF - which has a life-span of 25 years - collects 75 percent of property taxes on new development. The other 25 percent goes to the Celina School District.

According to school treasurer Mike Marbaugh, the district gives up 50 percent to the city with a TIF.

"Basically, the TIF helps the city get the things done it needs to get done," he said.

The school's state foundation money - a large portion of the district's revenue - usually decreases when the city's property valuation goes up, Marbaugh said.

However, when TIFs are active and city property valuation increases, the school's share of state money stays the same.

"The TIF is exempt from the laws of taxation from the school foundation program," Marbaugh said.

Also, if TIF districts bring in new industries, new income tax is generated, he added.

"There's a lot of things that go into that discussion and decision," he said about TIFs.

TIF funds are used to pay for the related costs of public infrastructure improvements, including payments of principle and interest on funds borrowed to complete capital improvements, according to Bryan.

Since 2004, the city has pursued 79 capital improvement projects totaling $30.3 million and 13.5 percent, or $4.1 million, was financed through TIF funds already received and expected. Only 2.4 percent, or $717,500, was used from the city's general fund, often for engineering expenses. Various federal, state and private grants and city utility funds paid for the remainder of the costs.