Tax Increment Funding and CRA
Last week I shared with the SunTimes readers a report of the CRA...
Last week I shared with the SunTimes readers a report of the CRA visioning session. While writing the article I was remiss in explaining what CRA stands for and what it is. I want to thank the readers that reached out to me to find out.
CRA is an acronym that can stand for two items; Community Redevelopment Agency or Community Redevelopment Area. The agency is the organization that is set up to oversee the area. State Statute 163 is the enabling law that provides guidelines for establishing CRA’s. The City and County had to approve the CRA through ordinance.
When establishing the CRA the city had to establish geographical boundaries that encompass an area that is deemed to have “slum and blight” conditions as out lined in the state statute. Slum and blight is not narrowly defined as one would picture in the inner city housing complexes. The conditions also include, but are not limited to deteriorated housing, depressed or deceasing property values, crime, antiquated infrastructure including street layout, parking deficiency and other physical attributes that are lacking. The CRA must have at least two of these to qualify.
Hallandale Beach CRA encompasses all properties west of 14th Avenue. When established there is a baseline property value set at the time the ordinance is adopted. The taxes that are collected on the properties within the CRA are locked in and become the base year. They are placed in a trust fund to be used to address the blighted conditions. This tax revenue is called Tax Increment Funds TIF. Our CRA has TIF that include contributions from the city, county and other taxing districts, including hospital district and Children Services Council. School districts are exempt.
The life of our CRA TIF agreement is thirty years. Some CRA’s have extended their agreements. These extensions must be ratified by the taxing authorities that contribute TIF. The CRA is set up with the City Commission serving as the Board of Directors. The Directors hire an Executive Director to run the day to day operations of the CRA and implement the CRA plan. The BOD also adopts an annual budget to be used to implement projects and programs that address slum and blight and pay for administration and operating costs to run the CRA. In 2003 the County fought the regulations requiring them to contribute to CRA’s. Dania Beach CRA is one that does not receive TIF Contributions from the county.
The TIF has grown over the years since values have gone up. When values drop the TIF goes down. Last year TIF reached 11 million dollars. CRA dollars can only be spent within the CRA for projects that fit the plan. When the money is not spent or projects are not completed the money must be rolled over back into the trust fund.
During the vision Executive Director Miller laid out an analysis of the CRA budget spending by category. The largest category is programmatic service. This category included all services and programs provided by the CRA and the services provided by the city to implement programs and represents 57 %( 6.7 million) of the budget. Capital investments represent 15.8% (1.8m) of the budget, staff in CRA represents 9.3 %( 1.0m) of the budget and the current debt service represents 17 %( 1.9m) of the budget.
Many CRAs implement bonds to expedite projects. To date our CRA has borrowed money to purchase land and perform some facility upgrades within the CRA. As I wrote in last week’s article the CRA BOD has set up a long term vision for the next 13 years. To expedite the plans the BOD set priorities to invest in more bricks and mortar projects that will have a more tangible result.
This type of borrowing will not increase taxes at all. The TIF is only for the CRA and the bond is based on projected future revenues from the CRA. Mrs. Miller evaluated the bond capacity of our CRA with the bond consultants and our CRA has a bonding capacity of over 40 million dollars. The BOD directed her to move forward in the budgeting process and work on establishing RFP for engineering and design of the targeted infrastructure projects. She will also be working with bond counsel to work on the borrowing plan so we can take advantage of the current low interest rates. After the engineering is complete the BOD will be able to further redefine targeted projects per quadrant.
The mission of our CRA is to enhance the quality of life by eliminating and preventing blighted conditions through the facilitation of community partnerships, business growth, job creation and neighborhood rehabilitation to promote economic development. We are committed to fulfill the goals of CRA through strategies that create and preserve our neighborhoods and are shifting in high gear with improvements.
Please join me on Thursday February 21st for the “Annual State of the City Address” at 12 PM. The event is being hosted by the Chamber of Commerce at the Community Cultural Center and is open to the public. Lunch will be served before my presentation. Lunch reservations are $15 for chamber members and $20 for non members.
As always please feel free to contact me at any time with your questions and concerns at my office 954-457-1318 or cell/text 954-632-5700 or e-mail me at www.MayorJoyCooper.com