City's tiff districts: Some are hot, others are not

By Bob Zientara

“Tax increment financing” is a term that most taxpayers may not understand.

But it is an important financial tool for the city of Barron, and it involves taxpayer-generated money (at least at the start).

The city’s five active “tax increment districts” were reviewed by the City Council at its regular monthly meeting Tuesday, May 8, 2018.

The city still has five active tax increment districts. They include:

• TID 2 — which takes in the city Industrial Park.

• TID 3 — including the residential area north of Golf View and west of the county Justice Center & Barron Electric Co-op.

• TID 4 – takes in much of downtown Barron, but also includes some residential areas to the south and east.

• TID 5 — on the east side of the city, south of Hwy. 8, including the new Synergy Co-op Travel Center.

• TID 6 – the newest tax increment district. It includes the Cobblestone Hotel & Suites, a city-developed parking lot between the hotel and the nearby Rolling Oaks Golf Course, and the golf course, itself.

In each of the districts, the city borrowed money to pay for start-up construction, install utilities and pave streets.

The city will get to keep any new (additional) property taxes generated within each district to pay back what it borrowed to do the original work.

As the name implies, tax increment districts are meant to generate additional money each year that they exist. But that does not always happen.

One example is TID 3, the mainly residential area on the northwest corner of Barron.

In 2012, the city seized 28 vacant lots in a subdivision owned by Augusta Building Corporation, when the owners fell too far behind on their property taxes.

Before the lots were seized, each one was generating about $1,500 a year in taxes and special assessments. Much of that money was used to reimburse the city for what it cost to install streets, curb and gutter, water mains and sewers that serve the development.

After the seizure, the city needed to draw about $90,000 from its “rainy day fund” to make a debt payment for the utility work. That money, in turn, came from the general fund, which comes from city property taxpayers.

At the time the city drew on its general fund to make a debt payment on the Augusta Building Corp. subdivision, the city still owed $127,000 on the loan it took out to install the utilities.

According to Bob Kazmierski, city administrator and clerk-treasurer, the city is drawing on money from TID 2 (the Industrial Park) to help pay the continuing debt for TID 3.

TID 6 (Cobblestone) has a different story to tell. After a year in which the city paid most of the debt for the money it borrowed to build the parking area, the financial picture is slowly improving for the district, as Cobblestone’s property value increases.

The tax increment districts will be discussed at a meeting of the TID Joint Review Board at 4 p.m. Thursday, June 21, 2018, at City Hall.

The board includes officials from each of the taxing bodies (school, county, technical college) which would normally get any new property taxes generated in each of the districts. Barron representatives include Mayor Ron Fladten and citizen member Dan Stephens.

The city still owes debt connected to one other TID – that which includes Rolling Oaks Golf Course. At the council meeting May 8, members approved an offer from CCF Bank to refinance nearly $900,000 existing debt owed by the city for what it cost to build the golf course and the Barron Area Community Center.

Reduced payments by the city – over the next nine years – will enable it to save more than $40,000 as it pays off the principal and interest on that debt, the council was told.

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