10 - Tax Increment Financing Reinvestment Zone Number 1 - Project & Financing Plan

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Item No. 10 TO: Mayor & City Council Gene Anderson, Interim City Manager FROM: Carla Easton, PE, Director of Engineering Planning & Community Development SUBJECT: TAX INCREMENT FINANCING — 2019 Downtown TIRZ DATE: November 4, 2019 BACKGROUND: Tax Increment Financing (TIF) is a commonly used method for setting aside funds that can be used to develop or redevelop targeted areas within cities, especially downtowns. This funding mechanism works by allocating the incremental tax increase resulting from property improvements within the designated zone to be spent on public infrastructure within the zone. Once the Tax Increment Reinvestment Zone (TIRZ) is created, the incremental increase earned each year, as compared to the base tax year, is set aside to be used to fund projects within the TIRZ rather than going to the general fund. A city can decide what percentage of the tax rate to set aside in the fund, and other taxing entities such as the county can participate. Paris has a large, historic downtown with many infrastructure needs that often deter its redevelopment. By creating a TIRZ that includes the downtown area as well as other developable areas of town, we will have a better opportunity of earning the needed funds over time to be reinvested in the downtown. STATUS OF ISSUE: Staff has worked with consultant Larry Cline to develop a preliminary financing plan for a 30 -year TIRZ. The plan includes development projections to estimate the earnings over the 30 year period, and also provides a list of projects to be funded. The first step to implementing this plan is to hold a public hearing and adopt an ordinance designating the TIRZ boundary. Attached for your consideration is the Reinvestment Zone Number 1 Preliminary Project and Financing Plan. Mr. Cline will be available at the council meeting to present this information and answer any questions. BUDGET: NA. RECOMMENDATION: Approval of an ordinance adopting Reinvestment Zone Number 1 Boundary, Preliminary Project, and Financing Plan.