City Commission approves TIF funding for downtown group, despite some concerns
City Commissioners approved $5,000 in tax increment financing funds for the Downtown Development Partnership during their meeting this week.
The DDP requested the funds to help cover the group’s annual operating costs such as insurance, conference attendance fees and membership dues.
Commissioners approved the request in a 4-1 vote. A similar request for the same amount last year was approved with a 3-2 vote.
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In both cases, Commissioner Bill Bronson voted against the funding request, citing concerns about the appropriateness of using TIF funds for operating costs versus infrastructure, especially in light of moves at the Legislature to further restrict TIFs, which most local governments in Montana view as one of their few economic development tools.
The downtown TIF fund currently has a balance of $472,583.96, according to the city finance office.
Funds for the 2019 fiscal year have not yet been received in the fund.
Commissioners approved $25,000 out of the downtown TIF fund for a wayfinding project, but those funds have not yet been spent.
The city will likely request $150,000 of downtown TIF funds to support an estimated $802,000 worth of needed improvements in the city’s two downtown parking garages.
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The DDP is a 501c3 nonprofit and has 11 permanent members: Downtown Great Falls Association, Business Improvement District, Great Falls Development Authority, the city’s Neighborhood Council 7, City of Great Falls Parking Commission, City of Great Falls, Cascade County, City-County Historic Preservation Advisory Commission, Great Falls Area Chamber of Commerce, Great Falls School District 1 and NeighborWorks Great Falls.
Sherrie Arey, NWGF director and a DDP member, told commissioners that the TIF funding would allow the group to put funding toward other projects focused on improving the downtown area.
The DDP spent last year’s TIF allocation as follows: $1,328 for insurance coverage; $2,609.83 to send an officer to the National Main Street Conference; and $350 for dues for membership in the National Main Street Program, but those funds are expected to be reimbursed by the Montana Department of Commerce, according to the staff report.
Last year, the commission also approved $5,000 in TIF funds to the DDP for development of a website.
In their application, the DDP notes that by receiving these funds, it has strengthened its capacity by helping grow its net assets from $4,768.37 at the beginning of fiscal year 2018 to $20,546.03 at the end of FY18. About half of that was revenue generated by hosting the Montana Main Street Conference in fall 2017.
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According to the DDP application, that increased funding has given the group flexibility to support more projects that help implement the downtown master plan, including the BID’s traffic signal art project and a $2,000 grant match for the Montana Department of Commerce’s $8,000 downtown pedlet program grant.
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In the city staff report, Planning Director Craig Raymond wrote that if the DDP continued to request TIF funds in the future, he would recommend that those requests be tied to specific projects or expenses.
“Show us you’re worth it,” he said.
Commissioner Bill Bronson said that he was “again reluctant” to approve this type of request though it meets the legal requirements and he supports the work of the DDP member organizations.
He said he didn’t think granting the TIF requests was consistent with the 2011 Great Falls Downtown Master Plan and doesn’t like granting blanket requests. This type of request raises red flags with people in the Legislature, he said.
There have been several efforts in recent years at the Legislature to curtail the use of TIFs, something Bronson and other city officials, as well as people at the Montana League of Cities and Towns, have publicly expressed concern over.
Bronson said he still only views the DDP as a collaborative of groups that are independently doing good work in the downtown “but it’s not clear to me what the organization itself is doing to advance the goals set forth in the master plan.”
He said he’d prefer to see a work plan similar to what the Business Improvement District and Tourism Business Improvement District submit annually, though those groups are funded with a specific assessment to property owners within their boundaries.
Bronson said funding operating costs for nonprofits versus physical infrastructure raises questions about TIFs.
It was virtually the same discussion some commissioners had last December and Commissioner Tracy Houck said that despite the concerns being communicated publicly, the DDP submitted an application very similar to last year’s.
“That was disheartening to me,” she said.
She asked if the DDP could reapply for the funds if the application was denied Tuesday. Raymond said that the group could reapply, but Houck voted to approve the application.
Commissioner Mary Moe said that it seemed to her the cure Bronson was seeking was legislative and that it was unfair to impose additional conditions on the DDP.
Bronson said it doesn’t require a law change, but he wanted the TIF requests to meet the requirements and expectations laid out in their own downtown master plan.
Commissioner Owen Robinson was not on the commission for the DDP funding discussion last December and said that maybe they’d learned a lesson on the issue. He voted to support the funding request.
Earlier this year, the commission approved the BID work plan and budget. During that July meeting, the BID’s community director, Joan Redeen, said there are 192 parcels within the district.
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In 2009, the taxable valuation within the BID was $65 million. In 2018, she said, it had nearly doubled to $110 million.
The BID recently met the threshold of property owners needed to approve renewal of the district for another 10 years. Formal renewal requires commission approval and that will likely occur in February.
