26 - TAX INCREMENT FINANCING - Laserfiche WebLink

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• Cause project plans to be prepared, approve and implement the plans, and otherwise achieve the purposes of the plan; • Acquire real property by purchase, condemnation, or other means to implement project plans and sell that property on the terms and conditions and in the manner it considers advisable; • Enter into agreements, including agreements with bondholders, determined by the governing body of the municipality to be necessary or convenient to implement project plans and achieve their purposes; • Acquire, construct, reconstruct, or install public works, facilities, or sites or other public improvements, including utilities, streets, street lights, water and sewer facilities, pedestrian malls and walkways, parks, flood and drainage facilities, or parking facilities, but not including educational facilities. Three funding mechanisms may be utilized by a TIRZ: 1. Pay -as- you -go uses the funds as they become available to finance projects. This involves the least amount of risk but may not be able to finance larger scale projects. 2. Issue bonds and finance project(s) with debt. The expectation is that the sooner the public portion is completed, the sooner private investment begins and the debt obligations are met. 3. Reimbursement to developers. The public project is funded and constructed by the private sector; the developer is then reimbursed as the incremental tax revenues are collected. This process is an incentive to the developer to work for a successful project which will grow in value. The most significant advantage is that a TIRZ does not require new taxes or assessments in order to fund improvements. The development pays the costs through increased captured revenue. Depending upon how a project is financed, the risks to the local government can be minimized by placing the burden on the private developers to generate the added value. There is no federal oversight and state review is limited to annual reports.