Improved financial performance of Twin Lakes’ downtown tax increment financing district has village officials doing some thinking about how to use the proceeds.
A TIF district is a financial tool to build public infrastructure with the aim of driving economic development. A TIF district freezes the tax base at its creation. Subsequent increased tax revenue — or increment — goes to fund the costs of the infrastructure projects.
After early on not being able to meet its required debt payment through increment and thus needing an infusion of cash from the village, the TIF has more recently been able to pay debt on its own plus generating a surplus, said village administrator Laura Jager.
“For a long time the village TIF was not doing well and was not generating its own increment,” Jager said. “As property values have since increased, the TIF is now generating sufficient increment to meet its obligation.”
The Twin Lakes TIF is now expected to generate an estimated $150,000 annual surplus starting this year. With a scheduled termination date of 2032, the district could generate about $900,000 in surplus by the time it expires.
Deciding how the village should spend the surplus is just getting started. Use of the TIF surplus would have to be in the district and contribute to economic development, Jager said.
If the district ends with a surplus, it would be distributed to all taxing bodies, such as the village and school districts, Jager said.
At Monday’s Village Board meeting, Trustee Kevin Fitzgerald presented an informal proposal related to increasing accessibility to the downtown parking lot south of Main Street and perhaps some improvements to Central Park. President Howard Skinner said improvements at Lance Park could be another possibility, but did not elaborate on specifics.
Trustee Aaron Karow suggested gathering public opinion, perhaps with a dedicated workshop meeting.
