City public works seeking $1.1 million in TIF funds for storm drain system in industrial district that includes ADF, Malteurop
The city planning board approved a tax increment financing request from the city public works department $1.1 million for public infrastructure projects in the Central Montana Agriculture and Technology Park, which includes Malteurop, ADF, International Steel Fabrication, T&K Performance LLC and Cargill research laboratories.
The TIF district was created by City Commissioners in 2005 and expanded in 2007 with the purpose of providing “needed infrastructure to attract and encourage the location of secondary, value-added industries to strengthen and diversify the community’s existing economic base,” according to the city staff report.
The city public works department has applied for, and received, TIF funds in the past for projects that improved roadway paving, sewer mains and storm drains.
The public works department is requesting $1.1 million from the TIF and will in turn pursue a State Revolving Fund loan against the TIF to fund the remaining $1.65 million for the construction project.
The current balance for the TIF district fund is $1,122,657.36, according to the city.
There are outstanding project balances for the storm drain design that total $57,931 and internal service charges that total $13,076. The CMATP TIF is getting about $315,000 in tax increment this year, according to the city staff report.
With the TIF funding, the city public works department is intending to construct a new storm drain system within the district. If approved, the city anticipates construction beginning late this year and into spring 2020.
The request will next go to the City Commission for consideration.
Tax increment financing allows municipalities to use new tax dollars from increasing taxable values for reinvestment within the geographic area in which they were derived for a period of 15 years, or up to 40 years if the funds are pledged to the repayment of a bond, according to city documents.
City planning staff recommend approval of the TIF request since the infrastructure improvement provides support to existing private business owners in the district and relieves them of the burden of having to complete the storm drain project themselves.
“The construction of a new storm drain is a standalone public infrastructure project, and will benefit not only the existing development, but will provide support for future industrial employers as well. Currently, there are several vacant lots within this district, and this improvement will make future development more feasible by reducing initial infrastructure costs,” according to the city staff report.