Recommended Reading 9: CID, TIF, & TDD; Tools in the City's Tool Box

Ibarra, Burlison call for greater CID awareness News-Leader.com Springfield News-Leader

I just have a few points to add to Johnson's article in today's News-Leader. Unfortunately, my allergies have been running amuck and yesterday I didn't feel up to recapping the meeting. So, I'll just add onto Johnson's accurate report.

Mayor Jim O'Neal wants to have a philosophical discussion about the use of community improvement districts (CIDs), tax increment financing (TIF), and transportation development districts (TDDs) before City staff asks for approval of many more projects involving the use of the development strategies.

"It's (the CID) an interesting political creature and I understand there's some philosophical discussion behind that," O'Neal said. "We'd like to have that discussion before we vote on many of these."

The comment came on the heels of a brief discussion raised by Councilman Nick Ibarra about the transparency, or lack of it, regarding community improvement districts. Ibarra asked Economic Development Director Mary Lilly Smith how the public knows when they are in a CID.

"There's no requirement that they post the sales tax at the register," Smith answered. She explained that the creation of the CID creates a new jurisdiction within the City.

After the creation of the district, those within it can seek an additional sales tax, in this case, The Shoppes at James River would use the proceeds of the sales tax to improve a storm water basin and take over the ongoing maintainence of the basin. The basin is currently the responsibility of the tax payer through the City. Developer Tom Rankin said he would be unable to pay the $300,000 for use of the basin, required improvements to it, and ongoing maintenance of it without an initial 1 percent tax.

"We can't afford to spend that kind of money without getting some return," Rankin said.

Smith explained that those who live within the district would not lose their ability to vote in support or opposition of the additional sales tax. Registered voters who live within the district would vote it up or down. Sometimes the districts, however, only contain the property owners, in which case, only the property owners would vote on whether to place an additional sales tax within the boundaries of the district.

By there being no requirement for the affected business owners to post the sales tax at the register, patrons who enter the district to make purchases within it are usually unaware they are paying a higher tax rate than they would at a store or restaurant not located within the community improvement district.

Councilman Doug Burlison was concerned about the CID's potential effect on any sort of a sales tax which might be initiated as a cure for the police and firefighter pension plan.

"If we're putting in an additional tax here and an additional tax there, that doesn't go unnoticed," Burlison said. He fears adding yet another community improvement district, with an additional 1 percent sales tax, will lessen the chance of passage of a pension sales tax for the pension fund.

The News-Leader article linked above lists the 7 existing CIDs within Springfield and the rate of additional sales tax each district charges.

The passage of Council Bill 2009-095 did not create a new CID. It authorized the Mayor to sign a petition to create the Shoppes at James River Community Improvement District. That step is a necessary, preliminary step for the creation of that district.

As a part of the explanation to the bill, the Planning and Development Department's Ralph Rognsdadt noted: "This resolution merely authorizes the Mayor to sign the petition to establish the CID. It does not establish the CID. The City Council will consider a bill to establish the district at a subsequent City Council meeting." At the time of the Council's consideration to establish the CID, the public will have an opportunity to speak.

The preliminary step was approved with Councilmen Ibarra and Burlison opposed.

City Manager Greg Burris indicated the budget should be the priority for the Council for the time being but, agreed the new Council needed to understand the development strategies.

"You do need to be aware of the tools we have in our tool box," Burris said. Burris said he will have a presentation prepared to facilitate a discussion about the development strategies in the near future.

For more information about Community Improvement Districts, Tax Increment Financing, Transportation Development Districts and other municipal development strategies click this link.

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