To help streamline the city of Mitchell’s Tax Increment Financing procedures, the Mitchell City Council approved adopting modifications to the TIF handbook earlier this month.

According to City Attorney Justin Johnson, the council approved an ordinance that modified the city’s existing TIF procedures and codes roughly a year ago in efforts to begin streamlining the process for developers seeking a TIF. At that time, the TIF Review Committee was eliminated and the city put the procedures more in line with the state law.

The previous process used to begin with an informal administrative review, followed by the TIF Review Committee. After the review process, the Planning Commission would then vote on recommending the TIF proposal, which would bring it to the City Council for the final stage, according to Johnson.

“Now, after the administrative review, it can go right to the Planning Commission and City Council,” Johnson said.

The use of TIF’s are designed to help municipalities finance redevelopment projects. Tax increment financing is a method of funding public development projects in an area by capturing, for a designated period of time, all of the increased tax revenue that results when public investment stimulates private investment. In a TIF, the increase in property tax revenue in the area is what funds public infrastructure improvements and pays back the city of Mitchell, and those improvements can be paid off over a 20-year period.

Johnson said the previous TIF Review Committee was made up of some outside members of the city, such as a member of the Chamber of Commerce, a Mitchell School District representative and a Davison County representative, to name a few.

Under the new TIF review process, the committee would be made up of an internal team consisting primarily of city officials, along with giving the acting mayor a choice of which outside representatives could be on the committee, Johnson said.

City Administrator Stephanie Ellwein said the changes take the process involved with the TIF Review Committee and includes that into the TIF handbook.

“The idea with that is trying to make sure developers in that initial phase of considering a TIF have an opportunity to have those confidential conversations first to make sure the proposed TIF is going to be in line with what city goals are for development,” Ellwein said, noting it eliminates more red tape around the process.

The council’s approval of the TIF handbook changes took place on Jan. 6, two days before Avera Queen of Peace announced the healthcare organization would generously donate 21.7 acres of land to go toward a plan of developing as many as 94 homes with the partnership of the Mitchell Area Development Corporation.

During the unveiling of the affordable housing development project on Jan. 9, Mitchell Mayor Bob Everson said he expected a TIF to fund about $2 million in infrastructure work in the new development area for streets and city utilities.

The city’s TIF handbook lays out the guidelines for applicants who are interested in applying for a TIF, which includes the city’s requirements for approving a TIF such as making sure the TIF stimulates economic development in Mitchell by assisting projects that promote the long term economic vitality of the community and contributes to the fulfillment of the city’s development or redevelopment objectives.

In addition, a subsection regarding the application requirements is included that states proposed uses of tax increment financing will be subject to economic analysis and risk assessment that will be conducted during the administrative review phase of the application process.

“We also included language that the council would approve a handbook so there would be some guidelines for people to follow when they’re beginning that application process,” Johnson said. “This is that handbook, but we just didn’t have a reason to bring it back until now.”