With an eye on spurring additional industrial growth on the north side of Warsaw, the city's Redevelopment Commission was asked to consider declaring a second tax increment financing district Monday.

Mayor Ernie Wiggins and City Planner Jeff Noffsinger told the commission they should consider declaring a second TIF district from Hidden Lake and the proposed location for a second sewage treatment plant near CR 150W north along Ind. 15 to near CR 350N.

"This is all for discussion purposes only," Wiggins said. "I want you folks to think about if this is something that needs to be done.

"The Zimmer TIF district wasn't an easy sell, so that's why I want you guys to discuss it," he added. "We're really just thinking out loud at this point and I want to hear any problems this commission may have with it."

Tax increment financing is an instrument local governments use to encourage commercial and industrial development. The concept behind the process is to have new business development pay for the streets, sewers, and water service improvements that are required for having it locate in a particular area.

In establishing a TIF district, the local taxing body freezes property values within the district. Bonds are then issued to make the necessary infrastructure improvements needed to encourage and promote the development, which in turn leads to higher property tax revenues. The increase in revenue is captured and used to repay the bonds and the interest on them.

According to Noffsinger, the funds generated by the TIF declaration would be used to extend sewer lines and build frontage roads along Ind. 15 and to make expansion to the west possible in the future.

"These (sewer and roads) would be the initial basis for the TIF district, with the understanding that this could be expanded to the west through annexation in the future," he said.

Additionally, Noffsinger said, the TIF district would help the city compete with nearby communities, such as Columbia City, for industrial development and the jobs and tax dollars that development brings.

"Columbia City is already ahead of us in terms of industrial development, because they've used TIF to expand their sewer and water systems to generate that development," he said.

Commission members expressed some concern about the proposed district, primarily in terms of additional costs to provide other city services and the cost of any debt service that may result.

"My concern is that we need to look at everything, in terms of total city resources - sewer, streets, police and fire - to make sure we are able to handle any expansion or annexation," said City Councilwoman Tammy Rockey, who also serves on the commission.

Commissioner Jerry Kralis

said he wanted firm financial projections on the cost and benefits of a second TIF district.

"I want to see what it's going to cost to extend the infrastructure to make sure we can pay for it with the gained increment," he said, "if we won't get enough from the TIF district or it won't be worth doing."

Noffsinger assured the commission that if the TIF district is approved, the funds raised through the resulting development would be more than enough to pay for the improvements.

"We could actually do this without actually having to issue any bonds. We could use the increment to fund some of the other improvements," he said, citing Fort Wayne as an example.

"Fort Wayne receives $1.5 million from its TIF district to pay for other infrastructure improvements. And they haven't issued any bonds," he said.

Noffsinger said the city could forgo recouping the increased tax assessment and allow other taxing entities, such as the library and schools, to benefit from the increased assessment.

The commission plans to discuss the proposal further at the Nov. 2 meeting. [[In-content Ad]]