Economic Development Program Administration
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Economic Development Program Administration 1
Transcript of Economic Development Program Administration
Economic Development Program Administration
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Erin Clark, RTA, EDFP
o City of Arlington Public Finance Administrator for 8 years
o 18 years total with City of Arlingtono Bachelor of Business Administration/Management
from Northwood Universityo Certified Property Tax Assessor‐Collector (RTA)o Certified Economic Development Finance Professional
(EDFP)
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1. What is economic development?2. Where do we as members of the
community fit in?3. How do we “do” economic development?4. How do we as finance officers fit in?5. How do we administer programs?
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o Efforts that seek to improve the economic well‐being and quality of life for a community
o Development of economic wealtho Brings outside money to your communityo Keeps wealth in the communityo Positions local economy on a high growth trajectory
o Achieved by o Creating and/or retaining jobs o Supporting or growing incomeso Supporting or growing the tax base
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o Your homeo Your employmento Education of yourself and your childreno Where you buy food, clothing and other consumer
goodso Entertainment o Parks, green space, librarieso Public safety and protectiono Quality of life
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o State passes enabling legislationo Local governments adopt programs o ED offices or corporations are practitionerso Zones on maps identify where we want growth to
happeno Partners in the community work togethero Incentives sometimes offered
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o Tax Abatementso Chapter 380/381 Agreementso Tax Increment Financingo Public Improvement Districtso Freeport and Goods‐In‐Transit Exemptionso EDCs ‐Type A and Type B o Hotel Occupancy Taxo Enterprise Zoneso Municipal Management Districts
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o Management of revenues and expenditureso Cash flowo Debt issuanceso Accounting transactionso Checks issuedo Revenues affectedo Tax rates affectedo Audit‐proofing the programso Transparency reporting
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o The bird’s‐eye viewo What are we trying to achieve as a communityo What enables us to do these things
o We are facilitatorso Fiduciary responsibilityo But don’t be an obstructionist
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o State legislation ‐ Laws and Ruleso Property tax codeo Local government codeo Administrative codeo Many others
o Local legislationo What funds can be used for
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o Types of agreementso Contractso Participation agreementso Interlocal agreements
o Why we choose one over the othero Versatility in fundingo Ease of administrationo Appropriateness for the situation (case by case)
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o City Councilo TIRZ Boardso City Manager’s Officeo City Attorney’s Officeo Economic Development Manager and staffo All divisions of Finance (accounting, budget, treasury)o Water Utilitieso Development and Planningo Public Works
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o Appraisal Districto County Assessor‐Collectoro Delinquent Collection Attorneyo Bond Counselo Financial Advisorso State Comptroller’s Officeo Local education providerso Developers and their consultantso Our own consultants (in some cases)o Auditors
o Internalo External
o Ultimately, the taxpayers
Reporting requirementso TIRZ Annual Reporto Annual EDC Reporto Enterprise Zone Reporto GASB 77o Transparency Stars
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oAnalysiso Pre‐agreement – partner with ED staffo Post‐agreement – see how well we did
oContract managemento Certification processo Report issueso Learn from scenarios we’ve encountered
oFinancial positiono Pro formas keep us saneo Manage cash flow issueso Budgeting skills
oReporting21
o Humano The internal teamo The external network
o Revenueso Property taxo Sales taxo Hotel occupancy taxo Others
o Toolso Data managemento Financial managemento ED management tools
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o Tax Rate splito How much is safe to spendo Does project pay for itselfo Is it beneficial for all stakeholderso Is it administratively feasibleo Is the developer or company reputableo Cash flow
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o Property tax basicso Sales tax basicso Basic economic development courseo Other introductory economic development basics
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o Data managemento Reportingo External forces
o Appraisal districto Legislation
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o Advisory capacityo What financing tools can be usedo Creativity is keyo We may not always know the financing gap
o Participate in writing the contracto Definitionso Criteriao Incentiveso Administration timelineo Breach and recapture
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Timeline should includeo Annual certification processo Verification of informationo Communication with partnering agencieso Verification that abatement was applied and tax bill is correct
o Verification that tax bill was paido Where applicable, verify that payments have been made timely and appropriately
o Annual auditing of resultso Reporting
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o Financial reportingo Pro Formao Operating positiono Investment reporting (bond issuances)o Annual report (TIRZ and others)o GASB 77
o Project reportingo Vital statisticso Details about agreemento Performance details
o Transparency Stars
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o Property Tax Code – Chapter 312o Taxes that are reduced by exempting a portion of the taxable value
o Exemption is applied before tax bill is createdo Base Year Value is fully taxedo Exemption is based only on eligible added valueo Appraisal District does much of the work
o Accept annual applicationo Coordinate with taxing entityo Apply exemption to appropriate property tax account(s)o Report to State
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o New abatemento Develop timeline (which fiscal years are involved)o Develop certification formo Ensure company knows responsibilities
o Annual certification processo February – send out certification formo April – receive certification back from companyo May – report percentage to appraisal districto September – verify final valueso October – check tax bill is correcto November – collect abated values and other account information from
appraisal districto Verify tax bill was paid on time
o Reporting for GASBo Reporting for Transparency Stars
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o Local Government Codeo Chapter 380 – Municipalitieso Chapter 381 – Counties
o Grant taxing entities broad discretion to make loans, grants and rebates of public funds
o May be tailored to unique needs of projecto Variety of different funding optionso Administered solely by taxing entity with limited input from partnering agencies
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o New agreemento Develop timeline (which fiscal years are involved)o Develop certification formo Ensure company knows responsibilities
o Annual certification process (if annual agreement)o February – send out certification formo April – receive certification back from companyo May – preliminary evaluationo September – verify final values and jobso January (following year) – verify tax bill was paid on timeo April – calculate amount of rebateo June – pay rebate
o Reporting for Transparency Starso Some agreements may require monthly or quarterly administrationo Don’t forget to budget for rebates!
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o Local Government Code –Chapter 372o Improve infrastructure to promote economic growth in a defined area
o Special assessment – not a tax levyo May be collected on tax bill along with taxes
o Certain circumstanceso Usually based on rate per $100 value, similar to property tax
o May be flat rateo Different administration considerations depending on assessment/collection method
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o New PIDo Petitiono Service and Assessment Plano Public Hearings
o Annual adoption processo Budget o Assessment/collection
o Who manages the PIDo Contract managemento Pay outso Certification of expenses
o Annual reporting35
o TIRZ = TIFo TIRZ = the zone on the mapo TIF = the financing methodo Call it what you want
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o Property Tax Code ‐Chapter 311o Finance public improvements, infrastructure and buildings within a designated area
o Future tax revenues that exceed the base year value are captured
o Taxing units may participateo May choose not too School districts no longer authorized to participateo May choose what portion of the tax rate to contribute
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o Help track board membership and appointmentso Participation in TIRZ board meetingso Values received from appraisal districto Annual billing of participating taxing entitieso Annual collection of revenueso Payments to TIRZ project developerso Transfers to participating city departmentso Financial tracking (pro forma)o Annual reporting
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o Local Government Code – Chapter 375o Sometimes called Downtown Management Districtso Created within existing commercial areas to finance facilities, infrastructure and services beyond those already provided by individual property owners or municipalities
o Improvements may be funded by self‐imposed property taxes, special assessments and impact fees or by other charges on district property owners
o Certain residential properties may be exempted from these taxes or fees
o Created to supplement, not supplant (or replace) the municipal services available to an area
o Does not relieve a city from its obligation to provide basic services to the MMD area
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o City of Arlington MMDo Located within TIRZ 6 Viridiano Enabled by City Councilo Managed by MMD Board, a third party administrator and the Viridian HOA Administrators
o Separate Taxing Entityo Adopts a new tax rate each yearo Issued debt for roads and water utilitieso TIRZ 6 increment funds are paid directly to the MMD to help support the debt
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o If you’re just starting outo Networko Read as much as you cano Seek educationo Legislative changes
o Program expansiono Benchmarko Researcho Additional educationo Data management considerations
o Keep in touch
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o General ‐ State Comptroller’s websitehttps://www.comptroller.texas.gov/economy/local/tax‐guides.php
o Property TaxoTexas Association of Assessing Officers http://www.taao.org/oTexas Department of Licensing and Regulation (TDLR) maintains a list of approved Continuing Education providers: https://www.tdlr.texas.gov/ce/ceptc.htm
o GFOA http://www.gfoa.org/economic‐development‐0
o Also see GFOA Best Practices on ED http://www.gfoa.org/best‐practices?field_committee_value=Economic_Development_and_Capital_Planning
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o Economic Development Financeo International Economic Development Council (IEDC)
http://www.iedconline.org/web‐pages/professional‐development/basic‐economic‐development‐courses‐bedc/
o Texas Economic Development Council (TEDC) https://www.texasedc.org/
o Texas A&M Engineering Extension Service (TEEX) https://teex.org/Pages/services/economic‐development.aspx
o Oklahoma University Economic Development Institute (OU‐EDI) http://www.ou.edu/outreach/edi.html
o National Development Council (NDC) http://ndconline.org/training/certification‐programs‐and‐recertification/
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o Tax Assessor‐Collector (under certain circumstances)o Economic Development Finance Professional (NDC)o Certified Economic Developer (IEDC, or through other providers such as OU‐EDI)
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o Texas Comptroller of Public Accountso Good examples:
City of Arlingtonhttp://www.arlington‐tx.gov/finance/financial‐transparency/economic‐development/
City of Carrolltonhttp://www.cityofcarrollton.com/business/carrollton‐development/incentives/active‐economic‐incentive‐agreements
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o Local government organizationso Appraisal districto Economic development corporationso Downtown / Main Street corporationso Tax assessor‐collector’s officeo People you meet at training classeso LinkedIn Groups
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DISCUSSION
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