The amount of dollars the city of Le Mars needs to pay for improvements in the Le Mars Urban Renewal Tax Incremental Financing (TIF) district will go down in the 2013-2014 budget.
The Le Mars Urban Renewal TIF district includes property in the southwest portion of Le Mars.
When a TIF district is set up by a local government, such as the city of Le Mars, any new tax dollars created by development in the geographic area in the TIF district are used to pay for economic development such as streets or utilities to serve the area.
The city plans to release $1 million in TIF receipts from the Le Mars Urban Renewal TIF district for use by other local governments, according to Bill Cole, city of Le Mars assistant administrator.
The city put the TIF district in place in 1992 to pay for improvements within the TIF district such as streets to serve new industry.
The portion of property taxes on the increases in value of property located within the TIF district are collected by the city for 25 years after that 1992 start date.
The Le Mars Community School District Board of Education and the Plymouth County Board of Supervisors and other local governments which collect taxes could levy property taxes in that district only for debt they had issued.
Currently, the tax revenue collected by the city from the TIF district is approximately $3 million, said Rex Knapp, Le Mars city councilman.
"We've lowered our TIF for that area by saying 'we only need $2 million dollars this year' so we released basically a third of the urban renewal area (tax receipts) early," Knapp said.
The city council approved the change in the amount of money needed from the Le Mars Urban Renewal TIF district in November and provided the paperwork to Plymouth County Auditor Stacey Feldman by Dec. 1 of last year, Knapp said.
The decision to release $1 million dollars in TIF receipts followed a review of the city's expenses in the TIF district, Knapp said.
The cost estimates to put in improvements for new businesses such as streets, sewer and water service in the Le Mars Urban Renewal TIF district were higher than the city's actual cost, he said.
"We got it done cheaper, but we also had more businesses locate in there at more value than we expected," Knapp said.