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State valuation cut leaves TIF District No. 2 with $841,000 shortfall; district to remain open
Summary
Staff reported that a state adjustment reduced TIF District No. 2's value, creating a roughly $841,000 deficit that will keep the district open beyond the original plan while revenues recover project costs; there is no outstanding debt in TIF 2, staff said.
Jessa reported that TIF District No. 2, created in 2004 around School Field Avenue, has added about $22,000,000 in assessed value since its creation but a recent state adjustment substantially reduced the district's measurable value.
"Without the large reduction we should have been able to pay off this project by next year, but with a deficit of $841,000, I think it's gonna take a couple years to pay off," Jessa said. She explained the district has no outstanding debt but will remain open while project repayment occurs; only administrative costs will continue while revenues are applied to recover the deficit.
Board members asked how long the district may remain open; staff said the district can remain open to 2031 and noted the expenditure period already ended in 2026, meaning there are no new grants or projects allowed, only administration and repayment activity. Members discussed that plan commission conversations have begun informally about housing TIFs under new state law but no proposal is active at this time.
The board did not take a vote on TIF 2's status at this meeting; staff summarized the financial position and next steps for recovery.
