Council reviews reduction of captured TIF values, seeks better use of rising TIF balances

Councilors on Monday reviewed proposed reductions to captured value percentages for multiple tax increment financing (TIF) districts and discussed strategies to increase productive use of rising TIF balances.

Councilor Berman asked whether the city was maximizing allowable use of TIF funds, noting that a portion of the city administrator and deputy city administrator salaries are charged to TIF districts. Economic Development Director Duchar explained that salary charges must be prorated to reflect the proportion of an employee's time spent on economic development and TIF district activities; some positions (department heads) are charged 100% because their duties are entirely within the economic development function.

Duchar outlined ways TIF dollars are already used: capital projects such as downtown sidewalks, gateway improvements, wayfinding signs and other infrastructure. She said there are 10 TIF districts and that rising property values within those districts increase captured amounts; staff are evaluating how best to use those funds while ensuring each district retains enough to cover its assigned expenses.

Councilors discussed using TIF funds for housing, downtown infrastructure and to leverage grant matching; staff said they will review utilization in preparation for the FY2027 budget cycle. No adoption vote occurred; councilors were assigned as resources to the respective TIF items for next week's adoption schedule.

Why it matters: how the city uses TIF dollars affects future capital projects, infrastructure planning and property‑tax distribution. Increasing utilization could accelerate local infrastructure work or housing incentives but must follow statutory and district constraints.