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Not wanting to count their chickens before they hatch, the Warsaw Redevelopment Commission decided Monday to seek 100 percent of the 2000 Tax Increment Financed payment.
"We have to start thinking about what percentage of the 2000 increment we want to claim," said city planner Jeff Noffsinger. "We should be getting a check in August for $74,000 and that will cover the $28,835 interest payment.
"I'm recommending until we get that August check we claim 100 percent of the 2000 increment payments until we're assured of that check. We can always reduce that request in the fall once we receive it," he added.
The city had assured the other taxing units - the school corporation, the library and the county - it would reduce its portion of the TIF payments to 50 percent as quickly as possible. But Noffsinger told the commission that until the money to cover the city's bond obligations is assured, the revenue should be kept in city accounts.
The city is scheduled to receive $147,898 in revenue from the Central Development District in 1999. The funds are received in two disbursements of $73,949, Noffsinger said. After a Dec. 31, 1999, increment receipt of $73,949, and a Feb. 1, 2000, bond payment of $113,835, the district's balance will be $59,162.
In regard to the recently declared Northern TIF District, declared last March by the Redevelopment Commission, Noffsinger said the 1999 TIF payments will be small because there has been no development to date. Any payments would be based on reassessment, and those figures aren't in yet.
"I know there's going to be an increase in the assessments. The TIF figures were based on 1998 assessments, payable in 1999," he said. "The initial payments will be in the neighborhood of $5,000 to $6,000.
"My recommendation is that we capture 100 percent of that increment to be able to fund some of the projects needed to get some development in that area," Noffsinger added.
Plans are to extend water and sewer service into the TIF district north of U.S. 30, Noffsinger said.
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 locating 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 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.
