Chickasaw County reviews using TIF from wind-turbine valuations to pay for roads, buildings

Chickasaw County supervisors on May 19 received a detailed briefing on using tax-increment financing generated by new wind-turbine valuation to fund county projects such as road repairs, storage and office space, and other infrastructure, and discussed next steps including internal loans, bond timing and the Dec. 1 TIF certification deadline.

A financial consultant told the board the wind-turbine valuation could produce roughly $339,000 in TIF income in year one and ramp toward about $2,000,000 a year as valuation phases in, with longer-term valuation growth producing roughly $100,000,000 of TIF valuation over time. The consultant cautioned that “you cannot claim any of this TIF income until you put an obligation on the books,” and noted that one option is to create an internal loan or to issue debt and certify that obligation before the Dec. 1 deadline.

The briefing put the potential scale in context: the county still has about $1.8 million remaining on an emergency communications equipment debt with roughly four years left; borrowing $3 million, $4 million or $5 million at an illustrative 4.25% rate would produce annual amortized payments of about $375,000, $499,000 and $625,000, respectively, while an interest-only first year could reduce near-term cash needs to roughly $130,000–$160,000. The consultant also said about $20,000 has been spent so far on planning and legal work and recommended repaying that from the first year of TIF revenue if the county creates an internal loan on the books.

Board members and staff pressed several timing and procedural points. The board was advised to confirm with County Assessor Ray Armel whether the turbine valuations are already in the base year (a “year 0” or earlier step) because that timing affects how much TIF revenue the county can certify this fall. The consultant said assessor abstracts are typically available by Sept. 1 and that appeals are expected to be completed by July 31, advising supervisors to check assessment timing now so the county can set an appropriate certification strategy for Dec. 1.

The consultant reviewed legal and fiscal considerations, including the county’s constitutional debt limit (5% of assessed valuation) and how the state property-tax changes under House File 718 affect levy computations. He said some of the largest uncertainty is legislative: recent property-tax reform discussions could reduce the portion of levy that is available to capture in a TIF for some years. He noted that some counties choose to claim the early years’ maximum TIF for a few years and then reduce claims later, while others take a smaller share to preserve general-fund levy growth.

Supervisors discussed candidate projects they might fund with TIF proceeds. Shorter, lower-cost starter projects discussed included a relocated county office/storage building estimated in the $400,000–$500,000 range; larger projects referenced in the plan included a West storage base and bridge and road work. Board members also discussed a city project that depends on county participation and a roughly $840,000 federal aid component that the consultant said could be jeopardized if the county does not structure its participation appropriately.

On financing strategy the consultant recommended grouping smaller projects into a single borrowing when practical to reduce repeated legal and issuance costs, and suggested starting financing preparations in August or September to allow a 12-week timeline to sell bonds if the board wants debt in place before Dec. 1. He also explained that many counties borrow on a general-obligation basis for wind-TIF projects; a TIF revenue bond is possible but would likely carry a higher interest rate because bondholders take revenue risk if state law changes.

No formal vote to obligate TIF revenues or to issue debt was taken at the May 19 meeting. The board gave staff direction to: confirm assessment timing with the county assessor; assemble and prioritize a short list of starter projects; consider creating an internal loan for early design or engineering costs; and plan public-hearing steps (the consultant suggested starting hearings as early as August or September for any debt the board intends to obligate this year). The board agreed to reconvene on project prioritization and financing timing.

Adjournment: The meeting closed with a motion to adjourn that was seconded and approved by voice vote at about noon.