Colfax’s TIF 3 & 4 “solid” financially
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By LeAnn R. Ralph
COLFAX — Colfax’s Tax Increment Financing Districts 3 and 4 are both in a solid financial position.
TIF 3 is projected to have revenue this year of $120,000, and TIF 4 has a positive fund balance of $10,000, said Sean Lentz of Ehlers, Inc., the village’s financial advisor, at the Joint Review Board annual meeting held at the Colfax village hall November 26.
State law now requires an annual meeting of a Joint Review Board for a TIF district that includes all of taxing authorities affected by the TIF.
The Joint Review Board for the two TIF districts in Colfax includes Gary Stene, village president, as the representative for the village; David Bartlett, chair of the Dunn County Board as the representative for Dunn County; Dan Lytle as the representative for Chippewa Valley Technical College; Bill Yingst, district administrator, as the representative for the Colfax school district; and Mike Buchner, village resident, as the public member of the Joint Review Board.
Buchner was re-appointed at the November 26 meeting as the member of the board representing the public.
A Tax Increment Finance District is a form of public financing that diverts property taxes on improvements in the district to be put toward an economic development project or a public improvement project.
Instead of the tax increment going to the Colfax school district, Chippewa Valley Technical College and Dunn County, the village retains the money.
When the TIF closes out, the other taxing jurisdictions receive the difference in the remaining funds.
The tax increment districts neither help nor hurt the school districts. When the TIF district closes out, the amount of money received by the school district is deducted by the state from state aid.
A tax increment district has a base property value when the district is formed. Each of the taxing authorities receives their share of the property taxes from the base value in the TIF district for the life of the district. When improvements are made within the tax increment district, the property taxes that would have been paid on the improvements, instead of being paid to the taxing authorities, go into a special fund for the village. The village can then use those funds to make further improvements in the TIF district, such as street projects.
Tax increment districts are set up for either 20 or 27 years.
The Colfax Village Board has approved sharing the revenue from TIF 4 with TIF 3.
During annual Joint Review Board meetings, “it is beneficial for the taxing districts to get up-to-date information on the TIDs so they are more aware of what is going on,” Lentz said.
TIF 3
TIF 3 was created in 2002 and was amended in 2006 to add property and amended again in 2014 to add expenditures and a half mile radius around the district to include more projects, Lentz said.
TIF 3 covers much of the downtown area and additional areas to the south and is known as a “blighted TIF” intended to rehabilitate specific areas of the village.
The termination date for TIF 3 is 2029. The district has a base value of $4.4 million and has $3 million in value added to it, Lentz said.
In 2017, TIF 3 had a positive cash balance of $175,000, and the district is expected to cover its expenditures by 2026, he said.
On the $3 million in value, TIF 3 had revenue of $84,000, and the district can also be a recipient of revenue from TIF 4, Lentz noted.
TIF 3 is projected to have revenue of $109,000 next year, $112,000 the year after that and $66,000 in the last couple of years, he said.
Stene wondered about adding more debt to TIF 3 for improvements.
If the additional debt is $200,000 or $300,000, then the expenditures would still be expected to be paid off by 2026, Lentz said.
If the debt is $500,000, a couple of more years would have to be added to pay it off, he said.
TIF 4
TIF 4 was created in 2006 and is a “mixed use” TIF containing residential, commercial and industrial development and was used to develop land on the south side of the village. Businesses and industries located in TIF District 4 and built after the TIF district was formed include Anderson Bridges and the Village Pointe Plaza containing Anytime Fitness, Mane Street Salon and Mom’s Restaurant and Pub.
Stene noted that right now, TIF 4 is sharing revenue with TIF 3, but there may be more TIF district projects.
The village is “cautiously hopeful” about adding value with duplexes in the East View residential development, and the industrial park is now full, so the village needs to purchase more land, he said.
If someone came to Colfax tomorrow and said he or she wanted to build a $10 million facility, the village would have nowhere to put it, Stene said.
The village board can stop revenue sharing between TIF 3 and 4 at any time, Lentz said.
TIF 4 was amended in 2016 to share revenue with TIF 3.
The expenses for TIF 4 will be paid off in 2021; a mixed-use TIF has a 20-year life, Lentz said.
TIF 4 has a base value of $1.8 million, and $1.08 million in value was added to the district, he said.
Stene said he was interested in leveraging the village’s money and borrowed money to be “pro-active” on development.
“If the money is not working, it’s not doing any good for the village,” he said.
Resolution
The Joint Review Board unanimously approved a resolution that will be provided to the state saying that the annual meeting has been held, the annual report for TIF 3 and 4, known as a PE-300 report, has been reviewed and the report also has been provided to the state.
