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Members of Vandalia’s Tax Increment Financing Advisory Committee last week got a refresher course on the program and their role in its operations.
They also learned that when they, the appointed delegates to the committee, are unable to be present for meetings to review a TIF application, someone else from the entity they represent can attend in their place.
For the meeting with Amber Daulbaugh, the city’s director of economic development, and Mayor Rick Gottman, four of the committee’s nine representatives were present.
Attending that meeting were Joe Lawson of the Vandalia School District, Sandy Michel of the Fayette County Mosquito Abatement District, Merrell Collins of Fayette County, and Nancy Pryor of the Fayette County Hospital District.
The meeting was called little more than a week after the board discussed Jay Leskera’s third TIF grant application, with some members afterward wanting clarification, or reinforcement, of the TIF guidelines and Best Practices document.
That Best Practices document, approved in November 2019, included the formation of a second advisory committee.
The city had an advisory committee in the initial days of its TIF program, but it was disbanded due to a number of committee member comments and concerns from members about the city council not going along with their grant recommendations.
In addition to those represented at last week’s meeting, those entities represented on the current advisory committee include the Vandalia City Council, Vandalia Park District, Evans Public Library District, Vandalia Township, Vandalia Road and Bridge, and Multi-Township Assessment District No. 1 and Bear Grove Township.
Daulbaugh went through the TIF Best Practices point by point, to make sure that members of the advisory committee understood them.
On the second point – The “but for” provision is applied appropriately to each individual TIF request – Michel asked for clarification of “but for.”
Gottman said that that means the committee, and the city council, is to consider whether a project would not be done “but for” TIF monies received from the city.
Lawson said, “‘But for’ is a safety net for us to kind of look step back and look and use that as a reason to or not to go for the project.”
On the point that a TIF project should “enhance the overall economy,” Collins said he believes that there should be some type of return.
“What kind of dollars is that going to bring to the city and or the taxing districts?” Collins asked.
Gottman said that the return can be more jobs, increased property tax revenues and, for retail businesses, increased sales tax dollars.
On point No. 5 – The city shall use its best efforts never to commit more than 25 percent of the total project cost through a TIF grant unless the project brings many jobs or a service or amenity not otherwise available in the City – Michel said that she wasn’t in favor of including the word “never” in that sentence.
“Never means that it’s not going to happen,” but that may not always be the case, she said.
Pryor asked, “Who determines the word ‘many’ for number of jobs? Is it over 12? Is it less than 100?”
Collins said that was the point he was trying to make in talking about the formula used to award grants.
Michel said, “I think I’d probably base it on the size of the project and what they are going to be doing.
“If you were wanting $180,000, and you’re only going to have three jobs and one was going to be full-time and two is going to be part-time, does that even out?” she said.
On point No. 6 – If there arc not viable projects to meet one hundred percent of the revenue collected through the TIF #I District according to said principles, the remaining revenue will be returned to Fayette County who will distribute to the taxing bodies annually. – Michel said, “I know that you don’t have to give us back any money.
“But wouldn’t there be a time that, in good faith, that you might possibly could be, because because I think that was the reason everybody agreed to all of this, because they thought they were going to be getting monies back.
“That’s why they agreed to extend the TIF. If that doesn’t happen, then I can see where we’re going to have a problem,” she said.
Currently, Daulbaugh said, taxing bodies can apply for any surplus funds.
“I would say nobody would apply for money if they didn’t need it, or whatever, but if there is additional monies there, I think everybody thought that they were going to be getting some back every year,” Michel said.
But, she said, “that’s not the case, the attorney told us the last time we met.
She asked whether if there are leftover funds in the TIF fund, “does it have to be for a project, or can it just be (that) they get the money because you have leftover,” saying that that’s been a point that has been discussed.
“That was what we thought,” Michel said, with Lawson adding, “That was our assumption.”
Gottman said that the city has an intergovernmental agreement with the school district for TIF funds, and emphasized that all of the taxing entities can apply for TIF funds.
Daulbaugh said that TIF is about “just putting businesses in positions to succeed, and recruit with streets and curbs and gutters and water and sewer.”
Daulbaugh also explained the “clawback” provision, through which those awarded TIF grants are required to return a percentage of their grant if they default, for example, by not providing the number of jobs they committed to in their application.
Members of the committee also agreed to support a change through which an alternate delegate can attend a meeting of the committee if the appointed delegate is unable to attend.