City staff outlines TIF districts, warns of debt and underperformance risks; council presses for compliance and clarity

Assistant City Manager Emily Miserelli gave City Council a plain-language briefing May 26 on tax increment financing, the redevelopment tool Morgantown has used in five districts to fund infrastructure by capturing future increases in assessed value.

"Tax increment financing . . . allows cities to use future increases in property value to basically spend and pay for things today," Miserelli told the workshop, adding that the mechanism sets a base assessment and redirects only the incremental tax revenue into a district fund used for debt service or pay-as-you-go projects.

Miserelli walked council through each district. The Riverfront ("wharf") district — established in 2003 and roughly 109 acres — has supported a parking garage and streetscape work but currently generates about $480,000 a year while carrying outstanding bond obligations; staff said payments are being made on a primary bond but the district is in default on subordinate bonds. The Falling Run district (also created in 2003) backed infrastructure for a mixed-use project that later failed; about $1.7 million in debt service remains. Sunnyside (created in 2008, roughly 148 acres) remains active after a 15-year extension the council approved in 2025. The Willie–Spruce–Brockway district is scheduled to terminate June 30, 2026; staff said the Easton Village TIFF will begin July 1, 2026, and two overlapping TIFFs cannot operate in the same area.

Miserelli stressed that TIFFs can be effective but are not guarantees of development, noting common failure modes: development that does not occur on schedule, parcels that become tax-exempt or change use, overly optimistic revenue projections and the need for a long financing runway when bonds are used. She also flagged equity concerns because existing TIFFs are concentrated near the city center.

Councilors asked detailed questions about the "but-for" justification developers must meet for TIFF support, and about how much increment the districts currently generate and how debt service compares to revenues. One council member urged benchmarking of city spending and stepped-up revenue compliance work as priorities before taking new revenue actions. Staff gave a concrete example: earlier collection letters for fire-service fees (lowering the overdue threshold from $1,000 to $500) uncovered several hundred thousand dollars in previously overlooked receivables.

Public comment tied fiscal risks to utilities: Jim Coatson, chair of the Morgantown Green Team, warned the regional utility (identified in his remarks as Managila Power) has proposed a roughly 1,200-megawatt gas-fired plant costing an estimated $2.5 billion and requested so-called abandonment authority from the state public service commission. Coatson said that, if granted and later the project failed to operate, ratepayers — and municipal budgets that pay utility bills — could be left covering costs. He urged council to consider a resolution opposing rate increases tied to such projects and to follow the PSC proceedings.

What's next: staff recommended moving forward with several operational steps if council concurs — completing a compliance evaluation of existing fees, improving public-facing budget materials, and considering targeted revenue tools such as franchise or street-cut fees. Council asked staff to return with data and options on the municipal service fee and sales tax proposals and to continue the compliance and benchmarking work before proposing substantial rate or fee increases.

The workshop did not include any formal votes on TIFF actions. Council directed staff to continue analysis and bring back clarifying financial data and recommendations.