Okaloosa County BOCC — March 18, 2013 — reading text

(download from website) “Family Heritage Wall of Honor”  Attach one 5x7 photo of nominee(s)  Donation: $30 per individual, or $50 for couple (e.g., Mr. & Mrs.)  Check or money order payable to Baker Block Museum (please do not mail cash) Donations are used to recognize those nominated and to fund the program  Submit in person or via mail no later than 5 April 2013 to the Packet Pg. 9  1.1.a Packet Pg. 10 Attachment: PIO UPDATE (1455 : Public Information Officer Presentation)  4.1 BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: March 5, 2013 TO: Honorable Chairman and Members of the Board FROM: Michael Chesser, Esquire SUBJECT: Tax Increment Financing Michael Chesser to present information to the Board concerning Tax Increment Financing. Several documents that he has written on the subject are attached for review. Packet Pg. 11  4.1.a Packet Pg. 12 Attachment: Chesser Letter (1422 : Tax Increment Financing)  4.1.b A Method Made For the Moment I’ve paid off a few mortgages in my life. Watching the amortization schedule speed up toward the end is a wonderful thing. I’ve never had enough money in an account to feel like I need do nothing but watch the interest accumulate, but I know it must feel great. Like being way ahead in a basketball game and watching the clock run down, you only have to stay vertical till the clock runs out. Here’s a thought, and the message for this article: If time or money mean anything at all, don’t drive through the City of Crestview on Friday afternoon. In fact, if that trip becomes important, pray for an accident and hope they call life flight. That is your only chance. Attachment: Chesser Method for Moment (1422 : Tax Increment Financing) Counties and Cities are seldom in the winner’s circle of those who are financially comfortable. Governments have trouble paying for what they have, not to mention getting what they need but don’t have. Have you ever wondered what Atlanta would look like without highway 285 or 400? Would the City have developed with the same quality construction as has now happened there? Did Atlanta wait until people built quality homes, commercial interests, malls, and industrial uses to plan, fund, and build those roads? I expect not. Those private investments would not have been possible unless the City had the vision and the courage to invest in its future. Change will require courage, because any public official who dares talk about taxes, even if we all know that’s part of the job, will be skewered. At the same time, if we are to serve the added population we campaigned for in BRAC, our politicians can’t pretend they don’t hear or see the obvious result. There is a way to take charge of our fate. I’ve said here before that tax increment financing (“TIF”) is there for the taking. Here’s how it would work: The County and the City make a joint resolution to identify a TIF area, which will be comprised primarily of land in which development has not occurred because of the lack of infrastructure. In the TIF district, all existing land and buildings will continue to be appraised and taxed annually, exactly as they had been before the resolution. Those taxes go to the County or City, as before. Neither government loses a dime of current revenue. But at the same time each government says in this resolution that tax revenue from all future improvements or increases in appraisal values in the TIF district are to be captured to be applied to infrastructure. Under the law, the captured tax revenue must be used to fund improvements within the TIF area. Everyone is a winner. An owner within the TIF district will see no difference in his taxes (unless he builds or upgrades his property; in which case his assessed value will increase only by the value of his upgrade). The County and the City have already paid the fixed costs of government and would have only marginal added costs from improvements within the TIF district. Actually, the tax revenue received would be pledged to pay off a bond issue, the proceeds of which would build roads, drainage improvements, water and sewer, or whatever the construction priorities happen to be. (It is possible that there has never been a better time to do long-term bond financing, because interest rates will never be lower. But even if there were no bond issue, the income Packet Pg. 13  4.1.b source could be used for County match for outside financing.) The magic is this: The County and the City lose nothing. The citizens lose nothing. Their taxes remain the same, except to the extent an owner either builds new construction or has increases in property value as a result of new infrastructure. We all gain better roads and better development within the TIF district. The rest of us can be like the guy with money in the bank, watching the interest climb. We quickly look like a community that cares enough to act, all without spending a dime from the tax base we have today. I admit there are those who believe that if we wait long enough, someone else will do it, or pay for it. But Realtors, homebuilders, and the Chambers of Commerce know better. We can do more than Attachment: Chesser Method for Moment (1422 : Tax Increment Financing) just be buffeted by a bad economy. TIF was made for this moment. These areas in the County will eventually develop even if we do nothing. But the quality of development, the pace of development, and our quality of life will be far different if we lead instead of follow. Packet Pg. 14  4.1.c Question: Let’s assume we can’t afford to build a by-pass and I-10 interchange around Crestview from existing tax dollars. What is “Tax Increment Financing”, and can it create money we don’t have? Tax Increment Financing is found money. It takes money you never had, and without TIF, may never get, and applies that money to very specific purposes. Here’s how it would work: In an unincorporated area (like those south of Crestview) a resolution would be passed by the County identifying a TIF area. Within Attachment: Chesser TIF (1422 : Tax Increment Financing) that area, all future construction of residential or commercial properties would be taxed exactly as properties outside the TIF area, but that tax income, or a defined portion of it, would be used to pay for public improvements like roads, to be defined in the resolution. There is no loss of existing tax revenue. Future revenues from the defined TIF area are used only for the purposes defined in the resolution. Within incorporated property, the City would pass a similar TIF resolution, and by inter-local agreement, the City and County would share in the funding of infrastructure. The infrastructure, (roads, inter-state exchange, bridges) would be funded by future growth, not by existing revenue. The theory is that without the construction of roads or the expansion of water and sewer, or in developed areas like cities, without the construction of public facilities like parking, quality private development can’t occur. This approach only works in an area where infrastructure improvements are relatively certain to be followed by surrounding private construction that creates new ad valorem tax revenue. A TIF project in an area zoned for farming for instance, wouldn’t be likely to cause single family homes or commercial structures to be built, and would be of little benefit. But in places of high residential or commercial demand, the construction of roads, bridges, or other infrastructure to accommodate that demand can be expected to fuel future growth, and therefor can be an excellent community investment. Packet Pg. 15  4.1.c The reason these expenses are an investment is that the TIF is temporary. Unlike tolls, that can be extended by application to other projects, a highway TIF for instance, has a precisely defined purpose and is extinguished when the roads are paid for. Generally, TIF income is used to repay bond issues, and there is no better time to borrow for public construction than right now. TIF works in any area where surrounding property can be reasonably expected to infill quickly if the Attachment: Chesser TIF (1422 : Tax Increment Financing) defined roads and other infrastructure needs are provided. If in downtown Fort Walton Beach, old and dated commercial properties would be replaced or improved if a multilevel parking garage were constructed, then a TIF financed garage would pay for itself. The enacting resolution would freeze the value of current properties and then apply all or a portion of future increases in revenue caused by increases in property value to pay for the structure. I have personally seen cities charge for public parking in a public-private partnership that awards tokens for retail purchases made in the benefited properties. That works especially well where one or more lead tenants seek to occupy adjacent or close- by locations to be benefited by the parking structure, and especially where they guarantee a portion of the cost. The above discussion is a quick outline of how TIF works. Coming discussions in this space will address more specific questions. I invite your comments to my e-mail address, because TIF can only be successful in Okaloosa County if the public supports it. All elected officials have run for office pledging that there would be no additional taxes, and both those officials and the people who elected them will have to share the conclusion that TIF allows investment of dollars they don’t have today for a better community tomorrow. Packet Pg. 16  4.1.c I want the Board of Realtors, the Homebuilder’s Association, the Bar Association, and other groups involved in the community and responsible for public attitudes to help. If you agree, your role will be to educate each other and the public. There may