TIFA: What is it?

by Jaime Greene on March 9, 2012

THE TAX INCREMENT FINANCE AUTHORITY ACT

 

Act 450 of 1980

 

AN ACT to prevent urban deterioration and encourage economic development and activity and to encourage neighborhood revitalization and historic preservation; to provide for the establishment of tax increment finance authorities and to prescribe their powers and duties; to authorize the acquisition and disposal of interests in real and personal property; to provide for the creation and implementation of development plans; to provide for the creation of a board to govern an authority and to prescribe its powers and duties; to permit the issuance of bonds and other evidences of indebtedness by an authority; to permit the use of tax increment financing; to reimburse authorities for certain losses of tax increment revenues; and to prescribe the powers and duties of certain state agencies and officers.

 

A link where you may read the Act in its entirety:

http://legislature.mi.gov/doc.aspx?mcl-Act-450-of-1980

 

The Basics:

The purpose of the Tax Increment Finance Authority (TIFA) is to promote economic and business development through programs and public improvement projects that create economic opportunity, provide entrepreneurial support, and improve property values while maintaining the historic nature of Richmond’s Downtown area.

 

The TIFA derives its funds from a geographically defined district.  The assessed value of properties located in the district at the time it was created established the baseline value. Any incremental increase in property values above this baseline are “captured” (put into the TIFA Fund) to be reinvested into the district also known as the TIFA.

 

How TIFA works:

Taxes captured above the baseline threshold must be used only within the TIFA district’s geographical area and only for the improvements to public places/facilities/streets as described in the TIFA plan.  The concept behind all of this is improvements are made in public places that reside within the TIFA district and benefit the public.  Such projects may include but are not limited to: public facilities and include streets, plazas, pedestrian malls and/or any improvements to public facilities including: furniture, beautification, parks, parking facilities, schools, libraries and other public institutions. Bridges, lakes, canals, utility lines, pipelines and other similar facilities are also included. Projects that would not be eligible would be those that are not public facilities, would not serve the public in general or would occur outside the boundaries of the TIFA district.  TIFA may also fund employees who work for and within TIFA areas.

 

It is the TIFA Plan that defines what TIFA money may be used for.

Original TIFA Plan and TIFA Map

 

How the City of Richmond has utilized TIFA:

While not an exhaustive list these are some of the projects we have funded in our community:

1.Business Improvements

  • Streetscape from Howard Street north to Park Street (Howard south was paid for by the General Fund)
  • Division Road reconstruction and installation of a center turn lane (Main Street to west City Limits 1999, Main Street to east city limits 2010)

2.Infrastructure

  • Roads, water, sewer, and storm into the 32 Acre Industrial area
  • Skinner Drive Reconstruction (also associated with industrial area) (summer of 2012)

3. Facade Programs (Facade program, Project Clean-Up, and Downtown Revitalization Program these programs are consistent every year and used)

  • Parking lot development (Forest Street Parking lot,  Repaving of Municipal Lot)
  • Numerous businesses making improvements to their buildings

4. Funding of downtown events

  • Winter and Ice brochure
  • Tree lighting
  • Easter egg hunt

5. Park Improvements/Investments

  • Trailhead Park adjacent to North Business District
  • Beebe and Bailey Park improvements
  • Loaned funds required to build the Richmond Community Center (being paid back from CDBG funds)
  • Repaired fencing, drainage and sidewalks around the tennis courts.
  • Fencing around the Horseshoe pits
  • Sidewalk along the parking area between the Community Center and Pool.
  • Rehab of the Pool
  • Dugouts for two of the Little League fields
  • Lighting for two of the Little League fields

6.Public Infrastructure

  • Police Building/Facility
  • City Hall Improvements
  • Arsenic Removal Plant (DPW location)

7.Investment in the community

  • The AUD
  • The entire Street Scape Project: Decorative bricks, historical street lighting, signs, banners, sidewalks, garbage cans, and benches
  • Seasonal Decorations
8.Adminstration
  • Lawyer Fees
  • Memberships
  • Training
Fund portions of employee wages and benefits as stated in the Public Act for the purpose of serving the TIFA district.
  • City Manager (who is also the Director of TIFA)
  • City Planner
  • Treasurer
  • Clerk
  • Secretarial Staff
  • DPW for services within the District

 

How other communities use TIFA:

City of Hillsdale

http://www.cityofhillsdale.org/tifa-district.aspx

City of Wyandotte

http://www.wyandotte.net/Departments/CommunityDevelopment/TIFAHistory.asp

Dearborn Heights

http://tifadh.com/

 

 

Here are some VOICE articles to further show evidence of how TIFA has improved our community:

1.Little Leaguers descend on Richmond:

Peanuts, Cracker Jacks and Bazooka Joe bubble gum will be in full supply over the next week as Richmond plays host to the 10- and 11-year-old Little League state tournament beginning today.  Richmond Little League president Melissa Mayes said this year’s tournament will be quite a bit bigger than last year’s 13- and 14-year-old state tournament.

For more of this story, click on or type the URL below:

http://www.voicenews.com/articles/2009/07/22/sports/20090722-archive1.txt

 

2.Richmond Fire Department waiting on new fire engine:

When Richmond firefighters get their new rig this summer, it will be just what the department ordered. That’s because the new engine is being custom designed for the fire department.

For more of this story, click on or type the URL below:

http://www.voicenews.com/articles/2008/12/17/localnews/20081217-archive10.txt

 

3.Richmond council votes to replace emergency sirens:

The Richmond City Council last week voted in favor of using TIFA funds to replace two emergency sirens located within the city limits.  Sirens located at the city hall and in the tower of the Richmond Volunteer Fire Department that are estimated to be over 50 years old have begun to wear out and malfunction necessitating their replacement. Because both locations are within the city’s TIFA district, funds from that entity will be available to make the nearly $30,000 purchase.

For more of this story, click on or type the URL below:

http://www.voicenews.com/articles/2011/01/12/news/doc4d2dbf679755b013789159.txt

 

4.Streetscape project approved:

Main Street may be a bit brighter this summer. The city of Richmond is going forward with plans to install street lighting, brick pavers and trees in an attempt to bring the city back to its historic roots.  The city’s streetscape project dates back to 1996, when a committee comprised of representatives from city council, the planning commission, the economic development corporation, the historical society, the tax increment finance authority and representatives of the community first met. Acting city manager Jon Moore said the committee met for three years and discussed what would be done and when.

For more of this story, click on or type the URL below:

http://www.voicenews.com/articles/2005/02/23/localnews/20050223-archive12.txt

 

5.Richmond public works department to get life saving equipment:

The Richmond City Council recently took measures to make sure each city department has access to life saving equipment. On Dec. 20 the council approved the purchase of two automated external defibrillators, or AEDs, to be stored at the DPW garage and in one of the meter buildings. The purchase was green-lit after the recent incident at the Richmond Post Office in which a post office employee was resuscitated by Richmond Police Chief David Teske and Officer Julia Frantz using an AED.

For more of this story, click on or type the URL below:

http://www.voicenews.com/articles/2010/12/29/news/doc4d1b522f121f0388403473.txt

 

6. The Aud’ getting closer to completion:

The regional youth complex, known as The Aud, is getting closer to completion, according to facility director Cindy Babisz. The complex is located in the old auditorium building on Main Street, which previously housed the Richmond school district administration offices. “The renovations are going very well,” Babisz said.

For more of this story, click on or type the URL below:

http://www.voicenews.com/articles/2009/12/22/news/doc4b30ff3929e88366738547.txt

 

8.Richmond chamber ready to get festive:

Anyone who’s driven through Richmond recently has probably seen the fall decorations adorning many of the businesses and light posts around the city. The decorations were provided jointly by the Richmond Area Chamber of Commerce and the city’s TIFA. Thanks to a holiday decorating contest organized by the chamber of commerce, area residents could see the fall decorations give way to those of the holiday variety later this year. Monique Lynch, owner of Crimson and Clover Floral & Gifts and one of the directors on the chamber’s board, said there are going to be two facets of the contest. One will be geared towards area businesses with the winner to be voted on by the general public. The other will be a community-wide home decorating contest where the winner will be picked from a group of nominated homes. The winner of each contest will get a sign and certificate to commemorate their win and possibly some other yet to be determined prize…

For more of this story, click on or type the URL below:

http://www.voicenews.com/articles/2010/10/20/life/doc4cbee8c917060096302372.txt

 

9.Richmond’s new fire engine is Michigan made:

When the Richmond Fire Department began looking around for a new fire engine to replace their existing model, which was about 13 years old, the firefighters knew they wanted one built in Michigan.  They got their wish when HME Ahrens-Fox, a Wyoming based company, submitted the lowest bid to build the new engine. The new truck was just recently delivered and firefighters couldn’t be happier with the investment.

For more of this story, click on or type the URL below:

http://www.voicenews.com/articles/2009/09/30/news/doc4ac22e06d0255110858284.txt

 

 

Tackling explaining and even understanding TIFA is an incredible task.  There are few communities that are able to offer a TIFA like we do as the State no longer allows it.  TIFA is a great tool to spur economic growth.

 

Currently our TIFA plan is in the process of being updated.  The update has been put on hold because of the economic/financial state of the City.  REMEMBER TIFA “captures” taxes that if the TIFA did not exist those taxes would go into the General Fund.  In addition after going through many past budgets it appears that funds have been set aside for different projects such as: a sprinkle park in Beebe Street Park, renovations to current or the moving of City Hall, redevelopment of property that has been acquisitioned, maintaining our current Facade Programs, repairs to existing city owned buildings, property redevelopment in general, Street Improvement Program, marketing of TIFA District, technology support for the marketing effort, slide for the pool, completion of Veterans Memorial, training for how to better utilize TIFA funds in general, more restrooms for Trail Head Park, improvements for Trail Head Park in general, Trail connection to Columbus County Park, Band Shell in Beebe Street Park, Bathrooms for the High School Stadium, Beebe Street Park ball Field improvements, Tennis Court improvements, Pavilion for Good Old Days grounds, Play structure for Beebe Street Park, Continuing improvements to Skate Park, Restoration of Historical Society District….are you getting the picture.

 

Long list eh? This is what I love about our Council…they LOVE this City and have a strong desire to improve it.  We dream and put those dreams into action.  We are a creative group, that is passionate about this city.  I hope I made it evident that there is a long list of improvements and it will take much time to get to them all.  When the TIFA plan update resumes I encourage you as a resident to come to the public meetings.  There will be an opportunity to let your voice be heard to the TIFA board, as to how you as a resident would desire the funds to be used.

 

Blessings!

In service,

Jaime Elizabeth Greene

 

{ 5 comments… read them below or add one }

Js March 9, 2012 at 8:05 pm

Great explanation. Thank you.

Reply

James Johns March 9, 2012 at 11:53 pm

Thank you for the great post. I look forward to your posts and enjoy the conversations. Looks like the city has a lot to do. I hope you get it all done Mrs. Green. Keep up the good work! Keep us posted!

Reply

buzzsaw March 10, 2012 at 9:09 am

The TIFA funds have become more of a public piggy bank for pet projects in this city. i fail to see any real economic benefit of many of the expenditures stated here. Oh if you try real hard to stretch a point it many of these things could be shown to have a negligible affect. The truth is though it’s just another way to spend the tax payers money.

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