Leading up to most elections, the Barre City Clerk’s office receives phone calls and emails — voters asking for information about the questions on the ballot. With the upcoming Nov. 5 special election to vote on the first Tax Increment Finance (TIF) district projects, the calls and emails have been coming in steadily. This op-ed piece provides some additional information about TIF districts and the November election.
Barre City voters go to the polls to vote on the following question: “Shall general obligation bonds of the City of Barre in an amount not to exceed Two Million Two Hundred Thousand Dollars ($2,200,000), be issued for the purpose of repaying the Semprebon Fund for costs incurred in applying for Tax Increment Financing approval and for financing public improvements to the Campbell Parking Lot, Steps 1A and 1B of the Merchants Row and Enterprise Aly Streetscape project, and development of a new public parking lot between North Main Street and Summer Street, at an estimated cost of Two Million Two Hundred Thousand Dollars ($2,200,000) utilizing new tax increment revenues from within the district for repayment, with the City liable for repayment of the indebtedness including all financing and related costs associated with such indebtedness regardless of whether the tax increment revenues are sufficient for such full repayment as required by law?”
That’s quite a mouthful. To re-phrase and simplify the question: “Shall the city of Barre bond in an amount not to exceed $2,200,000 for public infrastructure improvements to be paid for out of Tax Increment Finance district funds?”
In late 2012, Barre City was granted a TIF by the Vermont Economic Progress Council. A TIF district is an economic development tool that allows Barre City to make substantial public infrastructure improvements that will support private development in the city.
Every taxable property in the city pays both municipal and education taxes. When private development increases the value of a property, the municipal and education taxes go up on that property. Currently, the city gets the increased municipal taxes, and the state gets the increased education taxes. With a TIF, 75 percent of both the increased municipal and education taxes are kept by the city and are earmarked to pay the costs associated with public infrastructure improvements the city makes throughout the TIF district. Twenty-five percent of the increased municipal taxes go into the general fund and the state receives 25 percent of the increased education taxes. So the state gets extra money, the city general fund gets extra money and the city gets extra money to pay for public infrastructure improvements. This reallocation of the increased taxes lasts for 20 years. At the end of the 20 years, the city will be receiving 100 percent of the increased municipal taxes, and the state will be receiving 100 percent of the increased education taxes.
In developing the TIF plan for Barre, the city identified its TIF district, which is essentially the downtown. Any private new or re-development in the TIF district contributes into the program, and VEPC-approved public city infrastructure projects in the same area can be funded through the increased taxes received by the city through the program. The TIF plan lays out the proposed private projects within the district and their estimated increased property values. This allows the city to calculate the anticipated tax increase, so the city can determine how much public infrastructure development can be supported by the increased taxes. Every time the city wants to start a public infrastructure project, the voters will be asked for their approval. No project can start without voter approval.
On Nov. 5, Barre City voters are being asked to approve the first TIF projects, which are related to creating more public parking in the downtown. The projects include:
n Purchase of land to develop additional public parking between Summer and North Main Streets.
n Purchase of land as part of the re-development of Merchants Row parking.
n Bonding for these public parking projects will mean taking out a loan through the Vermont Municipal Bond Bank for an estimated term of 25 years. Costs associated with paying back the bond loan would include the principal, interest, and fees associated with applying for the loan, including attorney’s fees.
Development of City Place, the Blanchard Block and the new Merchant’s Bank building will fund the bonds for the public parking projects through the increased taxes over the next 20 years. If the increased taxes aren’t sufficient to pay the principal and interest on the bond debt, the city will remain liable to make the payments, however, the increased taxes related to the private development projects listed above are estimated to be more than enough to cover the bond payments for the public parking projects. The TIF district allows the city of Barre to make significant public infrastructure improvements without relying solely on general fund tax revenues to pay for them.
For more information about the Barre City TIF district, or the Nov. 5 election, contact the Barre City clerk’s office at (802) 476-0242 or email to firstname.lastname@example.org; or Barre City Planner Michael Miller at (802) 476-0245 or email to email@example.com; or visit the Barre City website at www.barrecity.org. In addition, look for presentations at public meetings and on public access TV.
Remember to vote Nov. 5. Polls at the Civic Center Auditorium will be open from 7 a.m. to 7 p.m. Early and absentee voting is available by stopping in at the city clerk’s office, or calling (802) 476-0242.
Carol Dawes is Barre City Clerk/Treasurer.MORE IN CommentaryThe Vermont House recently completed deliberations on a fiscal year 2016 general fund budget and ... Full Story
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