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Item No. 16 <br />TO: Mayor & City Council <br />FROM: John Godwin, City Manager <br />SUBJECT: 'FAX INCREMENT FINANCING <br />DATE. April 1"), 2018 <br />BACKGROUND: Tax increment financing is a commonly used methodology tor setting aside <br />funds to redevelop areas within cities, especially downtowns. Essentially it sets aside any <br />incremental tax amounts due to improvements within the area, and then allows those tax <br />increments to be spent only for a public purpose within that district. For example., if we were to <br />create a district, called a tax increment reinvestment zone (TIRZ), for downtown Paris, when <br />new construction causes ad valorem values to increase, the increased revenue will be placed into <br />a separate TIRZ fund instead of the city's general fund, <br />STATUS OF JSSU[: It can take a long time to reserve enough funds to make a notable <br />difference, but the sooner we begin to accumulate funds, the quicker we will have amounts <br />sufficient to start to make a difference. By knowing increased tax payments will stay in their <br />"neighborhood," property owners will often be encouraged to invest more readily, too. Finally, <br />with a TIRZ in place, should a significant project or need carne along, TIRZ funds can be <br />pledged against the sale of bonds. The attached briefing provides a more detailed description. A <br />TIRZ neither creates an abatement nor increases tax rates. <br />BUDGET: NA <br />RECOMMENDATION: Discussion and provide direction to staff. <br />