The possibility of a TIF (Tax Incremental Financing) district located in the north of town was discussed at Monday night’s Town Council meeting. “In order to keep the momentum, we felt it was important to bring forward to the council what those things might look like,” said William Hart, who served as acting town manager prior to the hiring of Kevin Smith. “They are marked as ‘first readings’ on the agenda but they are not.
They are here to serve as a discussion point. We hope to bring it forward in late September as a formal first reading, so this is just an example of what these things might look like.” The council had previously heard information about creating a TIF district for the Pettengill Road area. Hart said a TIF district has two components.
“The first piece, the Tax Incremental Finance district, is a statutory or legal construct created by the legislature that allows for changes in how property taxes that are collected by the town be allocated,” Hart said. The town must adopt the legislation that allows it to say, “We’re going to have a TIF district,” if such a district is desired, he said.
Once that is done, the next step would be to create the district and to articulate the guidelines of the district, including what portion of the collected taxes would be apportioned to whatever may come from that, and what specific needs the town may have that would be utilized through the TIF district. “Examples might be transportation,” Hart said.
He said staff has developed a plan and some guidance to the council as to what it should do when the time comes. “It’s important to recognize that neither of these actions binds the town in any way,” he added. “Simply doing these things doesn’t mean you must have a TIF. What it does mean, however, is that all the pieces are in place, should you as the legislative body representing the citizens of Londonderry decide that it’s in their best interest that that might be a mechanism to fund a road in the north of town.”
Hart said a TIF district has a beginning and an end. The end comes when the goals and objectives of the TIF district are met, and the beginning comes when the town says, “one, we’ve adopted the law, and two, we have a district and these are the rules and this is the administrator. “Once that happens, if you decide going forward to take advantage of that particular financing opportunity, be it a bond or some other financing opportunity, then you can do that,” Hart said.
Hart added that if a developer of the area comes in before the TIF is instituted, it is not a part of the TIF.
Hart said the readings were an opportunity for amendments of the ordinance. Councilor Tom Dolan said the law was under RSA 162 if anyone wished to look it up. Dolan noted that one of the misconceptions was that if the town embraced a TIF district, that meant it also embraced a bond, and that wasn’t true. “Only the voters can vote for a bond at Town Meeting,” Dolan said.
Councilor Joe Green asked if the TIF district meant that if the town had one area as a TIF, another one would have to be opened somewhere else. Hart said it did not mean that. Stu Arnett, contracted planner for the town, said Londonderry cannot include more than 10 percent of the land of the town for a TIF. Creating a TIF district for the Pettengill Road area would include 5 percent of the town land. He added that the TIF district only goes away when the bond is retired.