Source: Lake Geneva Regional News

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County changes TIF District ordinance

by Rob Ireland

January 03, 2013

ELKHORN — The Walworth County Board of Supervisors wants the group that oversees Tax Increment Financing (TIF) Districts to meet more often and with more notice.

In Walworth County, multiple municipalities have TIF districts, including the cities of Lake Geneva and Delavan and the villages of Fontana and Walworth.

When a community creates a TIF district it needs approval from a Joint Review Board (JRB). The JRB's membership consists of all the taxing bodies affected by the district, including county government. Changes to project plans and the district's boundaries also need approval from the JRB.

During its December meeting, the county board approved an ordinance that requires the JRB to have "sufficient time to offer feedback regarding the project plan prior to approval of said plan by the municipality."

In November, the change was recommended by the county's finance committee.

"These changes came out of suggestions from the city of Delavan's adviser," Supervisor Daniel Kilkenny said during that meeting.

Kilkenny said the county representative didn't have enough time to review district plans.

"She had questions and really couldn't do anything because it would cause the TIF to not be passed at all," Kilkenny said. "She just passed on faith that things would work out well."

Jessica Lanser, the county comptroller, met with Delavan's TIF adviser who suggested amending the county's ordinance.

"This ordinance change requests municipalities allow more time for the JRB to meet and offer feedback," Lanser wrote in a letter to the finance committee. "The request to have a standing JRB would also benefit the county by receiving additional information regarding the current financial status and future plans of the TIF district."

What is sufficient time?

If the majority of the JRB requests it, the state Department of Revenue (DOR) may review the TIF district's plans.

The DOR must determine whether a TIF plan is accurate and legal, according to the Wisconsin Tax Incremental Finance Manual.

For a community to meet the sufficient time requirement, there must be enough time for the DOR to complete a review and time for the JRB to obtain more information and review findings. The JRB can also request more public informational meetings.

Additionally the ordinance recommends more regular meetings of the JRB.

"Meetings should be convened based on the activity but no less frequently than biennially," the ordinance states.

"It lets the city know we want to make sure there is adequate time to review things and the standing committee is a good idea," Kilkenny said while discussing the ordinance at the finance committee meeting.

How does a TIF district work?

When a TIF district is created, a base value for it is determined. In theory, as improvements are made, those properties values will increase. Any increase in value over the base value is called increment.

The property in the TIF district will be taxed the same as if it wasn't in the district. However, where the money goes changes.

The regular taxing bodies collect from the base value, but the taxes on the increment go to fund projects within the district.

Before projects occur they must pass a "but for" test, which means the project wouldn't have occurred but for the TIF district.

In theory, values in the district will increase because of the improvements.