BRENHAM, WASHINGTON CO. OFFICIALS DISCUSS TAX REINVESTMENT ZONE
Washington County Commissioners met in workshop this (Tuesday) morning to discuss the creation of a tax reinvestment zone and refinancing information.
Brenham City Manager James Fisher met with commissioners to answer questions about the city’s plans to establish a Tax Increment Reinvestment Zone (TIRZ).
Fisher explained that the zone has to be set up by the city, along with appointments to the TIRZ board. He said the city will continue to work out the number of members on the board, to ensure equal representation if the county gets involved.
If a zone is set up, incremental increases in appraisal value will go into a fund, based on appraisal values and potentially tax rates. The increments would be split between the city’s general fund and TIRZ fund, and would help facilitate economic growth in undeveloped areas.
Fisher stated that locations placed in the reinvestment zone can be revised, and the current map can be changed to include county projects. He also said the zone does not have to be contiguous, meaning properties in the zone do not have to adjoin.
Fisher said that it will likely take several years to accumulate funds for projects, based on a pay-as-you-go basis, but a debt service could established. It would depend on what projects the city—and potentially county—pursues.
Once established, the TIRZ board will make project recommendations, with a governing body deciding on projects. Fisher added that the city is still determining what “a governing body” is.
All projects will need to be paid for by funds exclusively from the TIRZ, and Fisher said no money will be spent from the fund unless it is available. He did mention the possibility of using funds from the TIRZ, in conjunction with city or county funds, to pay for projects. Tax abatements would be allowed within a TIRZ.
Administrative costs, which must be paid before any funds go towards projects, are not to exceed 5 to 10 percent of total TIRZ costs. These costs include planning and engineering, and will be administered by city staff.
The Brenham City Council will further discuss the TIRZ at their meeting Thursday, with second reading and adoption of the ordinance scheduled for next Thursday. Fisher said the city intends to create an agreement that is “a true sense of partnership”.
Commissioners also met with Garry Kimball of Specialized Public Finance to discuss bonding for future county projects. Kimball presented options for refinancing the county’s current bond debt.
The county has $2.63 million left to pay from a $6 million bond, used for projects such as the courthouse annex on the square, building an EMS unit, and creating a storage system in the courthouse.
Kimball stated the county will not be able to refinance its debt until next year, as it can only be done every ten years, and the county refinanced in 2009. He gave preliminary numbers for how much the county would need to pay off, after rolling in new debt, and how long the county might want to take to pay it off.
If the county decides to refinance, it will need to publish a notice of intent, along with a debt service rate not to exceed a certain amount. Kimball said the process would take roughly 100 days, from start to finish. He cited the county’s “strong balance sheets” as a potential help.
Kimball noted that, if the county does decide to get involved with the TIRZ, its refinancing process could be affected.
Also at today’s (Tuesday) meeting, commissioners:
- Approved advertising for bids on the county’s roughly 9,000 acres of school land in Tom Green County. The tracts of land being advertised include two acres, 1,960.4 acres, 2,396 acres, 1,797 acres, 2013 acres, and 784.4 acres.
- Approved the county attorney’s office to offer the position of assistant district attorney to one of two experienced candidates, at a starting salary of $80,000. This is higher than the typical starting salary of $60,000, usually reserved for candidates straight out of law school.
- Accepted bids for Road and Bridge materials, excluding one bid for fleet fuel from Alexander Oil. As a result, the county will extend its current fleet fuel contract with WEX Bank for 60 days.
- Confirmed a replacement and reappointments to the Salary Review Committee. The replacement member is Sheriff Otto Hanak, while the reappointments are Kirk Hanath, Renee Mueller, Kristi Stamnes, and Peggy Kramer.
- Renewed the county’s participation in the Washington County rotation log for towing services for abandoned, impounded, junked and disabled vehicles.
- Approved Justice of the Peace Precinct 2 and 4’s request for Adobe Acrobat DC Pro from JP Technology funds.
There is a lot of confusion about what a TIRZ is and does. It is not a “tax incentive” or an abatement or a tax waiver for any business or corporation. It is a way to use tax money to fund projects in a specific area of development. I hope the following explains it better:
A Tax Increment Reinvestment Zone (TIRZ) is an economic development tool that captures the projected increase in tax revenue that is created by development within a defined area and reinvests those funds into public improvements and development projects that benefit the zone.
How Does It Work?
A base value is determined by the existing taxable value of real property within the TIRZ at the time the TIRZ is created. The taxing entities (i.e. the city, county and school district) continue to receive the base year value of the property taxes throughout the life of the 30-year zone. The increment, the portion of incremental increase in real property tax revenue above the base year resulting from increases in taxable value of property, is captured for the TIRZ. That money is used to fund public improvement projects within the zone.
In short, sounds like a huge power struggle between city and county. Creating businesses thru tax incentives creates jobs. BUT, in the past decades the citizens have not been well served by the protection / control methods of industrial development in this county. Controlled wages have produced a shameful poverty rate. Time for the old guard to step back and allow this community to grow in a meaningful way FOR ALL.
None of the KWHI articles I’ve read concerning the proposed TIRZ have been at all clear, and now that the county is also looking at getting involved, I invite the city to make available for download via both the city website and KWHI a .pdf factsheet laying out exactly what monies are involved and specifically how they will be spent.
As an example of where clarity is lacking, the phrase, “All projects will need to be paid for by funds exclusively from the TIRZ,” and the sentence, “He did mention the possibility of using funds from the TIRZ, in conjunction with city or county funds, to pay for projects,” directly contradict each other. Please explain.