The City of Decatur Tax Increment Reinvestment Zone (TIRZ) board voted to recommend that the City Council approve the final project and finance plan for Reinvestment Zone Number 1, with language acknowledging how “soft costs” tied to city services could be included in the plan.

The recommendation, made during the board’s first meeting on the TIRZ, directs the council to consider an ordinance at its next meeting to adopt the plan. “This is not a new tax,” city presenter Nate said, explaining that the TIRZ captures a portion of future ad valorem growth rather than creating an additional tax rate.

Board members and staff framed the zone as a financing tool to support public improvements such as roads, water and sewer lines, sidewalks and downtown infrastructure. The feasibility materials presented by P3 Works show a beginning taxable value for the district of roughly $360,000,000 and a projected ending taxable value exceeding $1,000,000,000 over the model period; staff used a conceptual $18,000,000 road-and-utilities project to illustrate possible debt and repayment profiles.

City staff explained the mechanics and limits of the zone. “Fifty percent of new revenues just in the district itself go into the TIRZ fund and the other 50% go to the general fund,” Nate said, describing the 50/50 increment split used in the feasibility model. Daniel of P3 Works emphasized that the TIRZ revenues are based on future ad valorem value: “The TIRZ dollars are based off of ad valorem…if your budget is being created off the values that are in the ground now, the TIRZ dollars wouldn’t affect that budget,” he said.

Councilmembers asked how the TIRZ would affect tight near-term budgets and staffing. Councilmember Darlene said staffing and service-level impacts were a central concern; staff responded that the plan can explicitly include project line items for city services and that the board can amend the project list and financing approach in future meetings. Staff noted that some planned residential development (example: Paloma Trails, Meadow Creek) lies inside the TIRZ boundary while others (Vista, Nature Creek) do not; the board’s revenue model assumes about 100 new homes per year in certain scenarios but will require periodic updates as development actualizes.

Board members also discussed intergovernmental participation and the option for other taxing entities to join the zone. Staff noted that any use of TIRZ dollars for development incentives or agreements would remain under the city’s control and subject to the city’s fiduciary and audit requirements.

At the close of the discussion, Councilmember Darlene moved to recommend the final project and finance plan for Reinvestment Zone Number 1 to the City Council “with an understanding of how soft costs can be used,” the motion was seconded, and the board voted in favor. The board meeting adjourned immediately after the vote.

The City Council will consider the ordinance and the final project and finance plan at its next scheduled council meeting.