Consultant outlines proposed expansion of Cleburne Tax Increment Reinvestment Zone No. 1; council to seek county cooperation

City consultants and staff outlined a proposed amendment on Sept. 23 to expand Tax Increment Reinvestment Zone (TIRZ) No. 1 and discussed next steps with Johnson County.

Natalie Ayala Hall of Pettit & Ayala Consulting told the council the proposed expanded boundaries would increase TIRZ No. 1 to roughly 1,688 acres, with about 771 acres inside city limits and about 917 acres in the city’s extraterritorial jurisdiction (ETJ). If the council and county complete amendments this fall, the expanded boundaries could use a 2025 base year; if action slips into spring the base year would be 2026. The proposal would extend the term for the expanded area to 30 years, terminating Dec. 31, 2055.

The consultants’ model projects a mix of uses with a heavy industrial component. Their projection of new development taxable value was approximately $996,000,000 (across the modeled horizon), and projected tax revenue for all taxing entities over the period was presented at roughly $700,000,000. The school district (ISD) share was estimated at about $286,000,000 in tax revenue under the projection. The consultants and staff said only the City of Cleburne and Johnson County were being asked to participate in increment capture for TIRZ No. 1; county participation outside city limits would be 0% under the current proposal.

To encourage county participation, consultants described a tiered contribution schedule for each taxing entity: 100% participation on the first $0–$25 million of each entity’s cumulative contribution, then 75% up to $50 million, 50% up to $75 million, and 25% thereafter. Consultants said the tiering is applied per entity (city and county) rather than on combined contributions so that each entity’s cumulative contributions independently determine when its participation percentage steps down.

Consultants provided a menu of eligible project costs (preliminary total program estimate $144,900,000) with heavy emphasis on infrastructure: public utilities (approx. 30% of eligible costs), street and intersection improvements (approx. 35%), pedestrian enhancements, open space and recreation, economic development grants (city funds only), and 2% for administration. Staff identified roughly $94.3 million in preliminary projects they have already considered for the TIF fund but said any expenditure would require a two-step approval (TIF board then city council) and a reimbursement agreement before public improvements proceed.

City staff said they plan to present the proposed amendment to the Commissioners Court on Oct. 14 and pursue an amended interlocal agreement (ILA) with Johnson County this fall to secure a 2025 base year. Council discussion indicated the county has expressed preliminary support for the tiered approach during earlier, informal briefings, but a formal county action and ILA would be required.

No formal council action was taken on Sept. 23; staff framed the presentation as informational and requested direction to pursue county discussions and next steps on the schedule.

Key numbers: proposed expanded acreage ~1,688 acres; projected new development taxable value ~ $996,000,000; projected tax revenue ~ $700,000,000; preliminary TIF program estimate $144,900,000; county participation proposal: tiered schedule, 0% outside city limits until annexation.

Next steps: staff to present the amendment to Commissioners Court Oct. 14 and, if county agrees, return with an amended creation ordinance and recommended ILA for council consideration.