Evaluation Guidelines

Following are some guidelines that Catherine Stoker uses when evaluating a potential TIF district or TIF project.

  1. TIF project must encourage business not residential development. Commercial development is the backbone of tax revenue that supports services to residents since businesses traditionally pay more in taxes than they use in tax-financed services, and residents use more services than they pay in taxes.
  2. The TIF project must be consistent with a feasible long-range business development plan for the affected area.

  3. Never over-extend the financial risk to the taxpayers. Borrowing for all TIF projects should not exceed 60% to 75% of the anticipated tax revenue, and the developer being benefited by the project must guarantee the dept payment until such time as the TIF income can make the payments. In spite of careful planning, the economy might cool down and/or the project might not go as quickly or be as successful as anticipated, and we don’t want the residential tax payer left to pay off the debt if the TIF is unsuccessful in generated as much tax revenue as planned. Remember the $258 million (cost plus interest on debt) Mike Fox Highway was supposed to bring 11,000 new jobs to Hamilton. Three years after the highway was completed, the City of Hamilton had lost 3,000 jobs.

    Additionally, if the developer goes bankrupt, the community or county might find itself paying for the improvements.

    Within that 60% to 70% of anticipated borrowing or spending should be allowances for funds for future improvements that will be needed to area infrastructure as the region develops.

    If too much money is committed to one or two major projects early in the 30-year TIF, there may be insufficient funds available for the millions of dollars that will be needed for road and other infrastructure improvements as more businesses and vehicles are attracted to the area. Additionally, the best interest rates come with projects that can show they are borrowing well within anticipated revenue.

  4. All TIF projects must be approved through a bond validation suit.

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