Council reviewed the proposed fiscal year 2026 budget for Tax Increment Reinvestment Zone (TIRZ) No. 2 and received details about downtown capital projects that would be managed through the zone.
Why it matters: The TIRZ budget funds several visible downtown projects including Poston Square improvements, a plaza, public restrooms, pickleball courts, public parking and corridor sidewalk work; the projects affect public space and routing of city funds and bonds.
TIRZ staff (speaker identified in the packet as Jason/department lead) explained that tax increment revenues are received two years after the tax year and described the participation rates: the original downtown area has 100% participation by all taxing jurisdictions; an expanded area is 75% city participation and 50% for other jurisdictions, with the local independent school district (ISD) at 0% for expansions under state statute.
The staff presentation showed estimated revenues and uses, including developer agreements with two downtown hotels (listed payment projections in the packet) and a debt-service payment on a $3.5 million loan used for plaza and streets projects. Staff reported an expected net sources-over-uses of approximately $676,002 for the proposed budget year.
On capital projects, staff described a $1,000,008 hard-cost construction sum (plus soft costs) that will flow through a construction manager. Staff named Duane Eaton as the planned construction management agent and said the manager’s contract will be presented at a future council meeting; Eaton would oversee daily construction and report weekly to staff.
Staff said several corridor improvement elements have not been bid yet (Northwest First, Second and Third Street corridor improvements) and that some bid prices already held by contractors were about 60 days old. The team said they have reduced project costs in places and plan land swaps to acquire parking and pickleball court parcels.
A council member confirmed that the TIRZ board makes decisions about projects and staff clarified that if the council approves the budget the project manager will proceed; staff said contractors have been holding bids for about 60 days and the TIRZ construction manager is working “at risk” until the manager’s contract is finalized.
Staff projected that the initial projects could be completed before the end of the next fiscal year if approved and bid packages move forward. Staffing for oversight will include existing staff and the city’s incoming Main Street manager, with landscape plants to be hand-selected by staff rather than left to contractors.
The presentation concluded with detail on fund balances and contingencies included in the project finance plan; staff said some contingency funds are being held back and that deed work and land-swap legal work are part of soft costs.